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|Negotiated Sales Limited In Dec Japanese Exports Of Ni-Based Stainless Steel|
Japan's stainless steel manufacturers face limited contract volumes so far in their export deals of nickel-based CR sheets under negotiation for December shipments to the rest of Asia, mainly to China. There are signs that the negotiations are caught in pricing difficulties. Offer prices stand a level of US$2,900/ton C&F, a price level that is described by the Japanese steelmakers as close to a bottom price. |
In the background are two main factors, according to market sources. For one thing, deals for December shipments concur with the time of least demand in a normal year. For another, South Korea's and Taiwan's stainless steel producers currently charge US$2,700/ton C&F for their exports of Ni-based CR sheets, prices that are lower by US$200 than the Japanese export prices. But the Japanese steelmakers are quoted as saying that they see no difficult situation for their export deals this time despite reduced sales volumes in the commodity grade of Ni-based CR sheets. They claim that they are conducting deals of supplies for specified purposes or those for longtime customers on the basis of price terms with an alloy surcharge.
China's stainless steel majors
China's five major stainless steel manufacturers operated their works at capacity in the July-September quarter. As a result, their production totaled 620,000 tons in July, 580,000 tons in August, and 580,000 tons in September. There are no announced data on what the five companies produced in October. There was information that their October production had fallen to half the earlier level. But no such level is believed to have occurred in their October production. As a result, it is considered certain that stainless steel stocks held by manufacturers or distributors represent considerable pileups. With various banks eager to collect loans toward yearend 2009, the environment makes it difficult for stainless steel producers whose funds in hand are insufficient.
At the end of October, Taiyuan Iron & Steel Group Co (Tisco), one of China's stainless steel majors, revised its domestic sales price downward of Ni-based CR sheets by Yn800 (US$118) Yn20,800/ton (US$3,059) after value-added tax. The sales price has moved sideways since the beginning of November, and it is likely to remain unchanged this week. Tisco is thought to have reacted to the current Wuxi stainless steel market assessed at Yn20,000/ton after VAT.
Tisco's sales price of Ni-based CR sheets declined to a low of Yn15,420/ton (US$2,267) after VAT in April this year and hit a high of Yn25,420/ton (US$3,738) in August. The present price amounts to the median between the low and the high. But the present price smacks of an overly reduced one, given LME nickel prices, market observers point out.
Export market situation
Taiwan's stainless steel producer Yieh United Steel Corp (Yusco) has offered a price increase of US$80/ton to US$2,700/ton C&F in its exports of Ni-based CR sheets for November shipments. A similar price level is reported for export deals of stainless steel by South Korea's integrated steelmaker Posco. Both Yusco and Posco apply flat prices in what they sell at home.
By comparison, transaction prices of Ni-based CR sheets in October were US$3,600/ton in Europe and US$3,300/ton in the USA. In November, they are US$3,450/ton in Europe and US$3,100/ton in the USA. The European price contains an alloy surcharge.
Under the existing circumstances, China's stainless steel market alone represents something of a cave-in among the world's stainless steel market conditions. Excepting China, there little anxiety about a steep fall in the world's stainless steel prices because the current stocks of products other than China's case are at their lowest level.
Demand recovery for Cr-based stainless steel
With a recovery of demand for chromium-based stainless steel, there is a continued increase in inquiries for the product. Having a major impact is a revival of supplies for the auto industry. Tisco's present sales price of Cr-based CR sheets is Yn12,020 (US$1,767) after VAT. At present, though, transaction prices of Cr-based CR sheets indicate something bipolar in Asia. The current Japanese prices stand a level of US$1,800/ton C&F for export deals. Meanwhile, the going Taiwanese and Chinese prices translate into a level of US$1,600/ton C&F. For the main reason, Japan's stainless steel producers are not so active in promoting sales in the field of commodity-grade products. In contrast, Tisco and Taiwan's stainless steel mills are eager to export their products at low prices.
|last modified : Thu 12 Nov, 2009 [10:38]|