According to information obtained by a source, Baoshan Iron & Steel (Baosteel) of China seems to have noticed on 8th to reduce its domestic prices of steel tinplates for June shipment by 100 CNY ($16) from those for May shipment to each customer. Baosteel increased its prices by 180 CNY ($29) for March shipment and by 160 CNY for April shipment and left them unchanged for May shipment. However, in case of May shipment, the company is said to have reduced its prices virtually for some customers by doing things like having expanded the discount range. The domestic prices of tinplates are seen to have moved downward from May shipment, and the company is to have taken a step to lower its list prices of tinplates in June shipment.|
The Japanese tinplate mills are foreseen to commence negotiations on tinplates for Asia for shipment of next quarter (July-September) soon. As the next quarter falls into the seasons of pineapple picking and tuna fishing, it is the demand season for tinplates continuously. Moreover, customers' inventory of tinplates is few, and inquires are still steadily sent to the Japanese mills. Even if price increase by the Japanese mills is difficult as much as that of this quarter, they are thinking to be able to carry out price increase of tinplates by $10 to 20 or so for next quarter as well. Although prices of steel products for general use like hot-rolled (HR) steel coils are weakening in the Asian region, what is required for tinplate prices is stability in prices. For this reason, the mills are thinking to be necessary to increase their prices as cost increase of raw materials has not been covered yet next quarter as well.
Baosteel's price reduction of tinplates becomes a heavy blow for the Japanese mills' negotiations on tinplates for Asia for next quarter shipment. It is because resentment of customers against price increase is deepened. In China where prices are most unstable, it is seen to be less disruptive to negotiations that Baosteel kept its price down of tinplates at around 100 CNY. It can be said for the Japanese mills not to have a room to reduce their prices unless otherwise there is no large change in costs of raw materials. That the Japanese mills are cautious about is movement of the rerollers rather than price decrease by Baosteel. As the weakening prices of HR coils are contributing to price down of material for the rerolling mills, there is a possibility for the rerollers to move to markdowns of their products (tinplates), and therefore, it seems that they need to watch for such movement.