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Japanese TMBP Export Prices Up Average $200 In Q2 Asian Deals
Japanese integrated steelmakers have won an average price increase of US$200/ton in negotiations on their export deals of TMBP (the substrate for tinplate) for shipments to Asian destinations in the April-June quarter. Until now, the negotiations are thought to have almost finished except those on shipments to China.

The price increases agreed represent a two-tier settlement. One price increase of US$250/ton is intended to complement "insufficient" price increases in the earlier deals. A second price increase of US$150/ton applies in meeting the case of an adequate price increase in the previous deals. As a result, the new TMBP prices are estimated at a level of US$1,150-1,200/ton FOB for April-June shipments.

As to Chinese deals, the negotiations are expected to make good progress this week, in which the Japanese steelmakers would seek a major price increase. The current Japanese export prices of TMBP for China differ considerably from the corresponding terms of shipments to Southeast Asia. As a result, there are fears that the Japanese steelmakers may face an in-house rejection of crude steel allocation to exportable TMBP for China unless the Japanese steelmakers can firm up the new price terms to practically comply with the existing offer prices, given a substantial increase in prices of blast furnace feed (iron ore and coking coal).

The Japanese steelmakers have enjoyed rapid progress since the beginning of March in their TMBP export negotiations on Q2 shipments to Asian destinations. In the background, China's Baosteel Co is contemplating executing a domestic price increase of tinplate by Yn500/ton (US$75) for April shipments. By comparison, there were forecasts earlier that the company's April price increase of tinplate would be Yn300/ton (US$45) or so.

Tinplate manufacturers in Southeast Asia reacted to Baosteel's tinplate price increase for April shipments with the recognition that blast furnace feed would come under a considerable advance in prices. Accordingly, the Japanese steelmakers made rapid progress in negotiations on their TMBP exports to the Southeast Asian tinplate manufacturers. Besides, it is likely that the current negotiations between the two sides will put an end to what the Japanese steelmakers describe as a confused state of TMBP and tinplate market conditions in Southeast Asia. The "mixed-up state" is believed to have ensued from Baosteel's domestic tinplate price reduction by Yn600/ton (US$90) for February shipments.

Meanwhile, the Japanese steelmakers are in advanced stages of negotiations on tinplate exports to Asian destinations as well for Q2 shipments. Negotiated prices so far go with an average increase of US$200/ton or beyond on the earlier terms. As a result, a high of the new tinplate prices is expected to border on US$1,500/ton FOB for shipments to Southeast Asia.

In contrast, it is understood that the Japanese steelmakers have yet to conclude negotiations on their tinplate exports to Latin America for Q2 shipments. On offer in the negotiations is a price increase of US$300/ton on FOB terms.
last modified : Fri 18 Mar, 2011 [09:51]
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