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| Japanese Stainless Export Expectations After Guangzhou Trade Fair |
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Japan's stainless steel producers have expectations in their export deals of nickel-based CR sheets for shipments to China in January next year after the Guangzhou trade fair that is scheduled to open in Guangdong province in the third and fourth weeks of October this year. It is likely that the Japanese steelmakers will mark time for a while on what they negotiate anew for exports of Ni-based CR sheets to China. They believe that it is difficult to offer the price level to meet what South Korea's and Taiwan's stainless steel mills currently charge for Chinese deals because it goes with a tough profit margin. The Korean and Taiwanese offer prices are estimated at a level of US$2,800/ton C&F. Accordingly, the Japanese steelmakers are considering offering their exports to China at around US$3,000/ton C&F. In this connection, they are expected to promote their export negotiations with local customers in and after late October. China's domestic stainless steel market for Ni-based CR sheets indicates no major change after the nation's 60th foundation anniversary and the subsequent holidays despite an upswing of Yn100/ton (US$147) in reaction to nickel prices on the rise. In a normal year, the Japanese steelmakers face slack negotiations on their exports of Ni-based CR sheets to China for November-December shipments because local customers favor purchases to meet immediate requirements alone in many cases because they settle their accounts in December. Chinese fiscal year ends in December. This year, it was a matter of attention how the customers would move after the national foundation anniversary and the subsequent holidays. Actually, though, they are still taking a strong position to mark time. In this connection, China's Taiyuan Iron & Steel Group Co (Tisco) keeps its aftertax quotations unchanged this week at Yn21,620/ton for Ni-based CR sheets and at Yn12,620/ton for chromium-based CR sheets. LME nickel prices have recovered to a level of US$8/lb this week. China's Wuxi stainless steel market has reacted with an advance of Yn1,000/ton to Yn21,000/ton (US$3,088) after tax for Ni-based CR sheets. But the Wuxi market has yet to show an upswing to reflect the recovered level of LME nickel prices. The Wuxi market peaked at Yn25,000/ton (US$3,676) after tax for Ni-based CR sheets in mid-August when LME nickel prices stood at US$9.50/lb. In the Wuxi area, stocks of stainless steel sheets totaled 200,000 tons as of Oct 1, up 10,000 tons from a month ago. Given the Wuxi market size, it is uncertain whether the total stocks then amounted to an excess level, but there are no signs of an increment in end users' stainless sheet stocks as a whole. At present, China's major stainless steel manufacturers such as Tisco have production cutbacks in effect at their works. Until now, Tisco have stopped its works for 20 days with front-loaded equipment repairs, while others such as Ningbo Baoxin Stainless Steel Co and Zhangjiagang Posco Steel Co have done likewise each for 10 days or so. Still, it is understood that the stainless steel manufacturers have a considerable quantity of products in stock each in the wake of their production at capacity in the April-August period. South Korea's Posco Group offered exports of Ni-based stainless CR sheets to China at US$2,700/ton C&F before China's national foundation anniversary. But the offer price disappeared as if to meet an upswing in nickel prices after the Chinese foundation anniversary and the subsequent holidays. South Korea's stainless steel rerollers find it difficult to allocate the CR sheets they produce for export deals because purchases of stainless HR coils from Posco cost W3,250,000/ton (US$2,777). Meanwhile, the Posco-affiliated stainless steel company recently commissioned enlarged facilities to produce 400,000 tpy of CR sheets after the replacement of equipment. Before the replacement, the company's CR sheet production stood at 150,000 tpy. |
| last modified : Tue 20 Oct, 2009 [10:25] |
