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Ni-Based Japanese Stainless Export Deals For Nov Shipments To China
Price Bargainings With Customers To Focus On $3,000 C&F Level

Japan's stainless steel producers are scheduled to start negotiations this week on their exports of nickel-based CR sheets to China for November shipments. It is likely that the negotiations with local customers will focus on a price level of US$3,000/ton C&F in the wake of a fall in China's domestic stainless steel market.

In China, domestic prices of stainless CR sheets fell steeply last week, while those of ordinary steel products have declined by Yn200-500/ton (US$30-74) so far since the beginning of August. As a result, it is likely that Chinese customers will demand a price reduction in their imports of Ni-based stainless CR sheets from Japan for November shipments. Japan's stainless steel producers are contracted to provide the Chinese customers Ni-based CR sheets at around US$3,100/ton C&F for October shipments.

China's stainless steel market for Ni-based CR sheets came down by as much as Yn1,500 (US$220) from Yn25,000/ton (US$3,680) after tax to Yn23,500/ton (US$3,460) after tax last week. Also, there are local moves for realization sales of stainless steel products as in the case of ordinary steel products. Local market conditions for Ni-based stainless CR sheets are virtually tied to daily fluctuations in LME nickel prices. With high nickel prices in August, China's domestic market for Ni-based stainless CR sheets advanced by Yn3,700 (US$540) then. Therefore, an advance of Yn2,200 (US$624) still remains in the domestic marked despite a fall of Yn1,500 last week. It is a matter of attention whether the domestic market will continue to fall.

In contrast, China's domestic prices of chromium-based stainless CR sheets are on the upside due to an increase in chromium prices and a recovery of demand, according to market sources. For an indicator, what Taiyuan Iron & Steel Group Co charges for Cr-based stainless CR sheets has climbed to Yn13,120/ton (US$1,926) after tax until now from a low of Yn9,320/ton (US$1,370) after tax.

China's stainless steel manufacturers operated their production facilities at capacity in July. They are believed to have done likewise in August as well even though their production performances then have yet to become clear. But it is uncertain whether they have won sufficient orders to meet their operations at capacity, market observers point out.

As to China's distribution stocks of stainless steel products, those in the Wuxi area totaled 156,000 tons as of August 20, up 4.7% from 149,000 tons at the end of July. But no data are available on product stocks held by various stainless steel producers. Accordingly, there are fears of a sudden increase in the nation's stainless steel stocks.

In South Korea, meanwhile, integrated steelmaker Posco increased its domestic sales price of Ni-based stainless CR sheets to W3,670,000/ton (US$2,936) at the end of August. In Taiwan, various stainless steel producers are said to have executed a price increase of US$450/ton to a level of US$3,000/ton C&F in what they export as Ni-based CR sheets. Therefore, the current Korean, Taiwanese, and Chinese prices of Ni-based CR sheets amount to a level of US$3,000/ton each, with the Chinese price translating into US$2,960/ton before tax. Under the existing circumstances in East Asia, it is likely that Japan's stainless steel producers will struggle to maintain a price level of US$3,000/ton C&F in their export deals of Ni-based CR sheets for November shipments to China, according to market sources.
last modified : Fri 11 Sep, 2009 [10:03]
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