| The TEX Report Topics < Steel > | |
| HOME >> Topics List >> October, 2009 >> 22 (Thu) |
| NSC's $100-150 Markups In Asian Deals Of TMBP Exports For Q1'10 Shipments |
|
With price increases of Y100-150/ton on offer, Nippon Steel Corp (NSC) has begun negotiations this week on its export deals of TMBP (the substrate for tinplate) for shipments to Asian destinations in the January-March quarter of 2010, it was learned Wednesday. The offer prices in the negotiations are estimated at a level of US$950/ton FOB, according to market sources. NSC is contemplating getting the negotiations into advanced stages late this week so that the company can shape up a new export market in the rest of October for its Asian deals of TMBP. Background Japanese integrated steelmakers already told various tinplate manufacturers in Asian destinations that a price increase would apply to Japanese TMBP exports for January-March shipments next year as well. The notice was made when the Japanese steelmakers held negotiations on their TMBP export deals for October-December shipments this year. At the time, the Japanese steelmakers gave an explanation to the effect that a cumulative TMBP price increase of around US$200/ton is necessary for shipments in October-March next toward stable TMBP supplies for the tinplate manufacturers concerned. The Japanese steelmakers faced an advance of US$350/ton in import prices of blast furnace feed (iron ore and coking coal) in 2008. But what they have secured as a price reduction is a mere US$150/ton in negotiated 2009 imports of blast furnace feed. As a result, they need to get a passalong of US$200/ton in their TMBP export deals, thereby holding down the costs of blast furnace feed to the level of 2007. For Q4 shipments this year, the Japanese steelmakers have achieved a TMBP price increase of around US$100/ton in the wake of their Asian customers' understanding of the background in point. As a result, most of the deals are settled at slightly below US$800/ton FOB, with a high of beyond US$800/ton FOB. On the occasion of the negotiations held on Q4 shipments, the Japanese steelmakers described their TMBP price requirements as a level of US$900/ton FOB for shipments in October-March next. Therefore, it follows that the Japanese steelmakers are on track to seek another TMBP price increase of around US$100/ton for Q1 shipments next year. Changed environment Nevertheless, the Japanese steelmakers find themselves in a changed environment for the TMBP exports they negotiate for Q1 shipments next year: an advanced appreciation of the yen against the US dollar. A problem with exchange rates is no matter to deliberate in TMBP export negotiations. Under in-house conditions, though, the Japanese steelmakers face instructions for increased offer prices by US$100-150/ton to a level of US$950/ton FOB, compared with the initial offer prices, to meet increased TMBP production costs in the repercussions of an appreciating yen against the US dollar. Tinplate demand in Asia Tinplate demand is on the upswing across Asia including China. In China, Baosteel Co has increased its domestic sales prices of tinplate by Yn800/ton (US$118) for October-December shipments. But the current question is falling prices of steel products such as HR coils in Asia despite a favorable price level of tinplate. Accordingly, the Japanese steelmakers believe that it is a must to avoid a ripple effect on TMBP prices. Behind falling price in Asia of steel products on the whole are the repercussions of increased production by China's small and midsize steelmakers. As a result, China's domestic stocks of steel products stand at an excess level. In China, it is only top-level integrated steel companies that produce TMBP. Besides, there is no major increase in what they put out as TMBP whereby no case exists of an excess TMBP stock at their works. |
| last modified : Tue 27 Oct, 2009 [10:24] |
