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| China's Wisco Cuts Domestic Sales Prices For Nov Shipments |
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China's Wuhan Iron & Steel Group Corp (Wisco) has informed domestic customers of sales price reductions by Yn600-800/ton in the company's November shipments of various steel products except grain-oriented electrical sheets, it was learned in Tokyo Thursday. The price reductions by the ton are Yn600 (US$88) for HR coils; Yn800 (US$118) for CR sheets; Yn300 (US$44) for hot-dip galvanized sheets; Yn400 (US$59) for commodity-grade heavy plates; Yn700 (US$103) for tinplate; Yn800 for non-oriented electrical sheets; and Yn400 for wire rods. As to grain-oriented electrical sheets, the asking price remains unchanged. But it is uncertain whether a price reduction or a flat price applies to ship plates (heavy plates for shipbuilding). As a result, Wisco's new price of HR coils translates into US$651/ton before tax, a price level that is lower by as much as US$81 than what Baosteel Co Ltd is supposed to charge for November shipments. Baosteel's new price translates into US$732/ton before tax. In this connection, Baosteel's new price of HR coils for November shipments amounts to a bottom price even after a passalong addition of around US$250/ton to meet increased raw materials costs, according to Japan's steel industry sources. Therefore, it is assumable that Baosteel would fall into the red if the company sells HR coils at a lower price level than US$732/ton. Likewise, there are forecasts that even Wisco will face deficits in its operations if the worst happens. With Wisco's major price reductions this time, there is a strong possibility that Anshan Iron & Steel Group Corp (Ansteel) will respond accordingly in its sales of various steel products for November shipments. Ansteel has already brought into effect an additional price reduction of Yn400/ton (US$59) for October shipments. Also, there is speculation that Baosteel may hold down what the company charges for December shipments as well. Meanwhile, China's various integrated steelmakers are scheduled to start preliminary negotiations from October onward on imports of essential raw materials from Australia and Brazil for shipments in fiscal 2009. In this connection, it is considered certain that China's domestic steel market conditions will work strongly against price increases in raw materials supplies from Australia and Brazil. There are even forecasts that some Chinese steelmakers will opt out of purchases if raw materials prices move up. |
| last modified : Wed 01 Oct, 2008 [11:33] |
