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Japanese CRNGO export talks with China on September shipment

(http://www.steelguru.com)
Updated: 2010-08-02 09:49
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TEX reported that Japan's integrated steelmakers are expected to face a crucial moment this week in negotiations on their export deals of non grain oriented electrical sheets with China's local users for September 2010 shipments. It is likely that the Japanese steelmakers will have to decide between the alternative options of an assured sales volume or a specified price level.

Meanwhile, the Chinese customers are unanimously demanding a price reduction for imports of non GO electrical sheets from Japan in the wake of a considerable domestic price reduction each by China's major integrated steelmakers for August shipments of non GO electrical sheets.

For August shipments, Baosteel Co has priced down non GO electrical sheets by CNY 650 per tonne for the high grade, by CNY 750 per tonne for the medium grade, and by CNY 850 per tonne the low grade. Also, Wuhan Iron & Steel Group Corp and Anshan Iron & Steel Group Corporation have held down what they charge by CNY 500 per tonne and by CNY 700 per tonne, respectively, for non GO electrical sheets.

For July 2010 shipments, the three major integrated steelmakers have a price reduction of CNY 500 to CNY 550 per tonne in effect for non GO electrical sheets. As a result, it follows that the major integrated steelmakers' cumulative price reductions of non GO electrical sheets in two months amount to what translates into the equivalent of a maximum USD 200 per tonne.

With the domestic price reductions of non GO electrical sheet in China, local users in manufacturing industries such as air conditioners are demanding reduced prices in imports of non GO electrical sheets under negotiation with the Japanese steelmakers for September shipments. Those users indicate a strong purchasing intention for non GO electrical sheets from Japan as their products are in high demand at home.

China's users are demanding price reductions in their imports of non GO electrical sheets from South Korea and Taiwan as well. There is information that South Korea's integrated steelmaker POSCO has responded with a price reduction of USD 100 per tonne. As a result, POSCO is thought to have concluded its new supply contracts of non GO electrical sheets with the Chinese customers at a price level of USD 800 to USD 850 per tonne FOB. Also, Taiwan's integrated steelmaker China Steel Corporation is said to have served notice to the Chinese customers on a certain price reduction of non GO electrical sheets. But it is uncertain what price reduction CSC will apply in its Chinese deals.

The Japanese steelmakers admit that it is difficult to maintain the current price level in their exports of non GO electrical sheets under negotiation for September shipments to China, given downward price pressure from the competition. As the Japanese steelmakers see it, there is no fundamental need for a domestic price reduction of non-GO electrical sheets in China because they are in high demand. In this connection, it is understood that China's major integrated steelmakers have held down what they charge for non-GO electrical sheets to maintain a price balance with other steel products such as CR sheets.

Meanwhile, there is a possibility that one of the Japanese steelmakers will opt to hold back on negotiating exports of non GO electrical sheets to China for September shipments. The company in point is preoccupied with the restoration of a damaged production facility after the recent fire at its works.

(Sourced from TEX Report Limited)
 

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