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Even Chinese Mills Reach Limit of Price Cut of HR Coils for Asia
In the Asian region, negotiations on hot-rolled (HR) steel coils have been commenced for December shipment, and among Chinese mills, some having dropped out from a price war are said to begin to appear. So, there is an aspect that a decrease in prices is coming close to a limit and prices will bottom out. Such atmosphere with no price down by more than $5 is increasing even if there are cases for prices to drop by $1-2 in the future.

Chinese mills and so on have commenced negotiations for Asia for December shipment, and offer prices of mills of that country are the level of $265 FOB or $285 CFR. It is usual for Chinese mills to commence negotiations for January shipment next year almost simultaneously following December shipment. In case of this time, a decrease in prices of them is said to have stayed at $1-2 without a price decrease by more than $5 for January shipment. It is said that there are some mills being unable to follow it and to seek levelling off of prices. It is reported that mills having lowered prices are only several companies including Benxi Iron & Steel. Differences in competitiveness are likely to have occurred among mills, and there seem to be some to withdraw from the export market.

Many of Chinese steel mills reported a deficit in the quarter of July-September, and if this goes on, it is no wonder that mills to go bankrupt appear. Trading companies to sell steel products for the domestic and export markets have coughed up most of commissions, and such situation for a state-run trading company to have gone into default has happened.

In the period of December to January, it falls on the lowest demand season within a year. As negotiations have been undertaken under the situation where customers strengthen a stance to refrain from buying, Chinese mills are likely to have been forced into a trial of strength. Chinese New Year falls on February 10 or so next year. It is usual for demand to be generated after the New Year holiday. Attention is paid to whether the struggle for existence is relaxed by increasing demand or weeding out has advanced further with continuous sever competition.
last modified : Thu 29 Oct, 2015 [13:39]
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