The TEX Report Topics < Ferro Alloys > Home
HOME >> Topics List >> December, 2008 >> 09 (Tue)
Negotiations With Japanese Mills On Price Of FeCr For Shipments In Q1 / 09 Are Taken Place
= Possibility To Settle The Price Earlier Than Europe, Inevitable To Reduce Its Price To Large Extent
The negotiations with stainless steel companies of Japan on price of South African charge chrome for shipments in the first quarter (January - March) of 2009 are scheduled to be taken place from this week. Usually, the negotiations are firstly taken place in Europe but, in this time, Japan becomes the first negotiator with South African producers. The reason is that, owing to a drastic cutback of stainless steel production and an excess of stocks, stainless steel mills of Europe are in the state to really wish to skip their purchases of charge chrome for shipments in January - March quarter of 2009 and, on the other hand, South African producers are supposed to be hard to grope for a place to capture this price settlement.

If the terrorism did not occur in an early part of December at the Taj Mahal Hotel in Mumbai City of India , the negotiations with Japanese mills on price of charge chrome for the first quarter of 2009 were taken place from last week but have been postponed by one week. An international chrome conference scheduled to be held in last week at New Delhi of India was broken off as an indirect result of the terrorism.

In the course of scarce buyers, spot price of charge chrome prevailed in Europe at present is in the range of 110 - 120 US-Cents per lb. of Cr, which is a considerably lower level than the benchmark price (185 US-Cents) settled in Europe for October - December quarter of 2008. A differential of prices for charge chrome between European mills and Japanese mills has existed in relation to the application of chrome surcharge on stainless steel products.

The chrome surcharge applied by stainless steel mills in Europe is based on prevailing price (seems to be that published in the industrial magazine concerned), having differed from the surcharge applied in Japan, and, on the other hand, the benchmark price of charge chrome fixed as a result of the serious negotiations taken place between Japanese consumers and South African producers (193 US-Cents per lb. of Cr CIF Japan for October - December quarter of 2008) is taken into the factor to put chrome surcharge on stainless steel products. This chrome surcharge has been applied to stainless steel products, which are exported from Japan under long term plant contracts, and, therefore, the chrome surcharge on stainless steel products is not possible to skip.

Under the situation, the negotiations with Japanese mills on price of South African charge chrome for shipments in January - March quarter of 2009 scheduled to be taken place from this week are necessary to be settled on a certain and reasonable price level. However, it is not clear yet whether the negotiations will reach an agreement within this year or not.

The price of charge chrome to be proposed by South African producers for shipments to Japan in January - March quarter of 2009 is not known yet but will be unable to differ largely from spot price currently prevailing in Europe and, accordingly, a price level of approximately 150 US-Cents per lb. CIF Japan is anticipated to be proposed. Also, Japanese consumers are supposed to consider a price level of 120 - 130 US-Cents CIF. A time allowed for the negotiations in this year is limited and this matter is thought to be carried over to the next year. Furthermore, the quantities of charge chrome to be purchased by stainless steel mills of Japan for shipments in January - March quarter of 2009 are restricted and, consequently, the price of charge chrome for January - March quarter is forecasted to have a possibility to be settled on an intermediate level by taking into consideration of price for the next quarter of April - June.
last modified : Fri 12 Dec, 2008 [10:52]
Copyright (C) 2004 The TEX Report Ltd. All Rights Reserved.