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Puzzlement Is Felt In Negotiations On Austenitic CR Stainless Sheets Against Ni Price Up
The LME nickel (Ni) price has risen to the level of $8 per pound since the latter half of last week, and both a seller and buyer look puzzled as it reached the mark all at once. Both are showing a wait-and-see stance this week. If the Ni price maintains the high level this week as well, the situation on austenitic cold-rolled (CR) stainless sheets is predicted to change drastically.

Offer prices of austenitic CR stainless sheets by the Korean mills and so on were around $2,500 to 2,600 CFR. Those of $2,500 CFR disappeared in these 3 days. The market price of austenitic CR stainless sheets in Wuxi of China became 19,000 CNY ($3,011 tax inclusive) in this week. It means that the price surged all at once by 900 CNY ($143 ditto). As prices of austenitic CR stainless sheets of Taiyuan Iron & Steel (TISCO) were 18,100 CNY ($2,868 ditto) for September shipment, those became a negative margin. Normally, the price difference between the prices of TISCO and the Wuxi market is 600 CNY. Consequently, there is a possibility that TISCO will revise its September price within this month, and raise them by about 1,200 CNY ($200). Inventory in the Wuxi market was 180 thousand tons as at September 10 which decreased by about 10 thousand tons from 190 thousand tons in the past.

The Taiwanese stainless mills left their domestic prices unchanged for September shipment. However, as their prices are set to link the Ni price, they seem to go into the direction of price increase by about $200 in dollar volume for October shipment. POSCO is also likely to narrow largely its discount range in the end of September.

In case of the USA, AK Steel, Allegheny Technologies and so on left their prices of austenitic CR stainless sheets unchanged for September shipment. However, they imply price increase due to the Ni price rise. The Ni price rose by $0.50 per pound on average in September to $7.50 to 7.60 which is to be applied to October prices. With this, the surcharge will be increased by $100 in October Shipment, and if the Ni price continues to rise, it is foreseen for the surcharge to be increased by another $100 to $200 in total. Europe is the same.

Under the circumstances, if the Ni price hovers in this trend, prices of austenitic CR stainless sheets will turn round sharply. The Japanese mills had offered their prices at $2,800 CFR for the Asian area, and had proceeded with negotiations recognizing price difference of as much as $200 from those of Korea, Taiwan and China. Obviously, the number of contracts had been limited. It is because the Japan premium is said to be up to $100 difference. However, if the Korean mills and so on raise their prices by $200, the Japanese mills' opportunity to conclude a contract will be seen to broaden even in case of increasing their prices by $100 to $2,900.

Meantime, prices of ferritic CR stainless sheets also continued to drop. There is a possibility for those to follow austenitic ones with no relation to price fluctuations of raw materials like ferro-Chromium. Therefore, if austenitic ones turn round, ferritic ones are likely to bottom out.
last modified : Wed 26 Sep, 2012 [14:33]
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