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| Asian Prices Of Commodity-Grade HR Coils To Hit Bottom Shortly |
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It is likely that transaction prices of commodity-grade HR coils will hit bottom shortly in export markets of Asia even though those HR coils face a continued fall in prices so far, according to market sources. Behind the outlook are Chinese steelmakers' export negotiations to provide commodity-grade HR coils for South Korea's steel rerollers and pipe manufacturers for shipments in the October-December quarter. Prices settled so far vary widely. Many of them stand at a level of US$900/ton FOB, while there are cases of settlements at a level of US$800/ton FOB. The prices as a whole indicate a fall of around US$200 from the level of the July-September quarter, a price level that compares with what currently applies in exports of Russian HR coils. In this connection, the Chinese steelmakers are thought to have slashed what they charge for HR coil exports in reaction to a considerable fall in July-August domestic demand due to factors besides steel production cutbacks for the Beijing Olympics and summer holidays. China's domestic HR coil market was Yn5,890/ton (US$866) after value-added tax at the end of August, a price level of slightly less than US$910/ton after the existing 5% export tax. As a result, it follows that no benefit will go with HR coil exports out of China if prices are lower than the negotiated ones for South Korea this time. With China's domestic HR coil market continuing to move sideways at present, there is a strong feeling that the market has already hit bottom. Accordingly, chances are the Chinese steelmakers will hold back on any further price reduction in the HR coil exports they negotiate, leading to the outlook that export prices of commodity-grade HR coils will hit bottom shortly in Asia. In contrast, demand for high-grade HR coils is still on the upswing in export markets of Asia. As a result, it is considered certain that Japanese integrated steelmakers will negotiate increased prices in their HR coil exports to Asian destinations for October-December shipments as well. The Japanese steelmakers are set to maintain an uptrend of prices even by rejecting what they provide if a user requires a price reduction. |
| last modified : Thu 25 Sep, 2008 [11:06] |
