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| Prudent Japanese Position On Dec Chinese Deals For Non-GO Elec Sheets |
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Japanese integrated steelmakers are prudent in negotiating their export deals of non-GO (grain oriented) electrical sheets for December shipments to China. Also, they are contemplating watching moves of China's major steelmakers in relation to their domestic sales of no-GO electrical sheets. On their part, the Japanese steelmakers are setting importance on what they negotiate for January-March shipments next year rather than December shipments when it comes to Chinese deals of non-GO electrical sheets. They are considering seeking flat prices for December shipments if they can. They even assume that they would opt out of their deals for December shipments as in the case of November shipments when China's major steelmakers have executed a domestic price reduction each of non-GO electric sheets for December shipments as well. The Japanese steelmakers offered price increases of US$50-100/ton when they conducted negotiations on their exports of non-GO electrical sheets to China for November shipments. At the time, the Japanese steelmakers succeeded in achieving part of the price increases on offer. Then, China's major steelmakers Baosteel Co, Anshan Iron & Steel Group Corp (Ansteel) and Wuhan Iron & Steel Group Corp (Wisco) reduced their sales prices of non-GO electrical sheets by Yn350-450/ton (US$51-66) for November shipments. Local customers reacted and demanded renegotiations for price reductions in their imports of non-GO electrical sheets from Japan for November shipments. The Japanese steelmakers, though, rejected the renegotiations and canceled their deals for November shipments. In China, it is deals of non-GO electrical sheets for January shipments that mark the beginning of the annual demand season for non-GO electrical sheets when production time starts for consumer electronics such as air conditioners and compressors. Still, there are fears that China's consumer electronics companies may have overproduced before the nation's 60th foundation anniversary. It is likely that China's major steelmakers will respond with a further price reduction of non-GO electrical sheets for December shipments if product stocks are known to have increased markedly in what the consumer electronics companies put out. At present, the domestic prices quoted by Baosteel, Ansteel and Wisco for non-GO electrical sheets translate into levels of US$800/ton for Baosteel's production, and US$750/ton each for Ansteel's and Wisco's, market sources estimate. By comparison, the Japanese steelmakers' current export prices of non-GO electrical sheets for China stand at a level of slightly lower than US$750/ton FOB, a price level beyond US$800/ton C&F for delivery in China. Baosteel's present domestic price is seen as a level of around US$700/ton, given the company's virtual discount in actual sales, which indicates a tough competitor to the Japanese steelmakers. Under the existing circumstances, it is uncertain whether the Japanese steelmakers can maintain the current prices in their exports of non-GO electrical sheets to China if the three major Chinese steelmakers cut their domestic prices for January-March shipments next year. |
| last modified : Mon 02 Nov, 2009 [10:40] |
