| News & Trends | ||
| Chinese domestic HRC price rebound on short supply - 09 Jul, 2008 | ||
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It is reported that home hot rolled steel coil prices in China have rebounded in July and it is better than people have expected. Shanghai Ruikun Materials Co Ltd which is specialized in trading of hot rolled steel coil and cold rolled steel coil said that the rebound is attributable to relief of capital availability of capital and a sharp increase of CNY 200 per tonne in ex works price by Shagang. The following facts and reasons are believed to result in the rebound in domestic HRC price: 1. Short supply due to maintenance by steel makers. Brief statistics show that four steel mills started their equipment maintenance in last month and the average duration is 9 days. It has led to a decrease of 380,000 tonnes to 400,000 tonnes in output and supply pressure is relieved. 2. Rising cost is bolstering price increase. For example, gasoline and diesel prices have been raised by CNY 1000 per tonne since June19th. Electricity fee was raised by CNY 0.025 per KWH and the average increase in steel production cost is CNY 6.25 per tonne and it means a rise of CNY 12 per tonne to CNY 35 per tonne for special steel producers. Hence, cost is up by CNY 300 per tonne as a result of increase in iron ore, coal, oil and electricity prices. Steel mills have to raise ex works prices to offset the added cost. Some steel makers in East China shot up HRC price by CNY 200 per tonne and the latest level is CNY 6100 per tonne for commercial 5.5mm up HRC. 3. Strong international steel prices support steel exports. Average HRC prices in Middle and East America and the EU is USD 1202 per tonne and USD 1279 per tonne. Export quotation for products from CISA has reached USD 1050 per tonne FOB. Further, South Korea steel producer has shot up ex works price by USD 145 per tonne. Great price gap between Chinese domestic price and international level resulted in robust steel outflow. HRC export tonnage in May is about 1 million tonne up by 18.5% YoY and 26.1% MoM. The volume is expected to jump to 1.2 million tonne for June or July shipment. According to industry insiders despite above mentioned factors that push up the increase in July, there are also such uncertainties as possible increase in export tariff rate and the fact that downstream users probably could not afford such expensive steel products later,. Hence, it is still important to pay attention to possible decrease in the summer. (Sourced from MySteel.net) | ||
| Export And Import Levels | ||
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| Trade Issues | ||
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| Indian steel companies push for iron ore export tax hike | |
