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| Continued Upswing In Asian Stainless Steel Market |
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Market prices of stainless CR sheets in Asia indicate a continued upswing except China's domestic stainless steel market. Having an impact are bullish export deals by stainless steel manufacturers in Japan, South Korea, and Taiwan. Japan's stainless steel producers find it necessary to get a price increase of at least US$850/ton in what they export, compared with a bottom price level of their exports. Main factors are increased costs of raw materials and stainless steel production, and changing exchange rates. In a rough calculation, a necessary price increase of US$850/ton breaks out as US$400 to meet a rise in raw materials prices, US$300 for a cost increase in stainless steel production, and US$150 for an appreciation of the yen to the US dollar. The Japanese steelmakers have already won an increased price level of US$1,900/ton C&F for June shipments of chromium-based CR sheets to China, given a bottom price of US$1,400/ton C&F. As a result, the Japanese steelmakers need a more price increase of US$350/ton for Cr-based CR sheets. As to nickel-based CR sheets, the Japanese steelmakers are set to seek a similar price increase after the existing price settlements of US$4,400-4,500/ton C&F for China. Leading Asian market conditions for stainless steel exports so far is South Korea's Posco. In February, the company executed domestic price increases for April of W650,000/ton (US$670) for Ni-based stainless CR sheets and W400,000/ton (US$410) for Cr-based stainless CR sheets. The company is bullish, too, in its offers of stainless steel exports. In the past, the company tended to become bearish when its customers requested a price reduction. This time, the Korean steel giant shows no sign of such attitude. Besides, Taiwan's stainless steel producers are bullish in their export deals. On offer is a price increase of US$500/ton FOB for June shipments of Ni-based CR sheets to South Korea. Likewise, a price increase of US$220/ton FOB is on offer from China's Taiyuan Iron & Steel Group Co in its exports of Ni-based CR sheets to South Korea. Nevertheless, China's domestic stainless steel market has changed little for the past two months. The current market prices in the Wuxi area are described as Yn32,000/ton (US$4,580) after tax for Ni-based CR sheets and Yn13,500/ton (US$1,930) after tax for Cr-based CR sheets. By comparison, stainless steel producers' quotations are Yn33,600/ton (US$4,800) for Ni-based CR sheets and Yn14,700/ton (US$2,100) for Cr-based sheets, asking prices that are lower than the going market prices. So far, there are no signs of an upswing in the domestic stainless market, with no speculative demand arising. In the Wuxi area, distribution stocks of stainless sheets (Ni- and Cr-based products) totaled 160,000 tons as of April 21, up 30,000 tons from what turned out in March. |
| last modified : Fri 25 Apr, 2008 [11:16] |
