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| Asia's HR Coil Market Recovery From April Onward? |
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There is growing speculation that HR coil market conditions for export deals in Asia will rebound for a recovery in or after April when an environment forms there for an upswing in HR coil prices, according to market sources. At present, the HR coil market in Asia is quiet due to the lunar New Year holidays in parts of East Asia such as China, South Korea, Taiwan, and Hong Kong. Attention has already begun to focus on how market conditions go after those holidays. In China, Baosteel Co Ltd intends to raise the HR coil price by Yn300 to Y4,437/ton (US$653) after value-added tax for March shipments. The company's new HR coil price translates into US$555/ton before VAT. In February, China's other major integrated steelmakers such as Wuhan Iron & Steel Group Corp and Anshan Iron & Steel Group Corp are expected to give domestic customers notice on separate price increases of HR coils for March shipments. China's domestic HR coil market is on the rise. The going market is lower by the equivalent of around US$50/ton than what various steelmakers charge for HR coils. Until now, market prices have come to reflect an advance in steelmakers' quotations. As a result, there are expectations that China's rising domestic prices of HR coils will have an impact on Asian market conditions for HR coils. Still, it is uncertain whether what is predominant in China will find its way into Asian market conditions. For the main bottleneck, HR coil exports are on offer to Asia for virtual distress sales out of sources such as South Africa, Egypt and the former Soviet bloc. Accordingly, offer prices of around US$600/ton C&F, prices that were once seen as a low level, belong to a high range of the current offers to Asia. It remains to be seen whether those low prices on offer to Asia will disappear in the immediate future. HR coils for sacrifice sales are limited in quantity, but low prices of HR coils are pervasive in the world's markets. In the past, an upswing in HR coil prices led to increased prices of HR coil derivatives such as CR sheets, but no advance in HR coils was expected in the absence of a rebound or advance in prices for the derivatives. Under the existing circumstances, no immediate rebound is expected in the prices of the derivatives, an environment that precludes an early upswing in HR coil prices for export deals in Asia. Therefore, there is growing speculation in market sources that it will be April or later before Asia's HR coil market conditions rebound for a recovery. |
| last modified : Fri 30 Jan, 2009 [10:19] |
