According to a source familiar with the matter, ArcelorMittal's price of H beams for ASEAN seems to reach the USD 900 CNF mark for August 2011 shipment eventually. The company tried to increase its price by USD 100 for July shipment for the Middle East and ASEAN areas but failed to do so.
After then, the company is believed to have succeeded a contract at the USD 850 CNF mark. It is said for the current price not to return to USD 850 CNF. As business negotiations are quiet in Middle East due to the Ramadan period, attention is focused whether its price is increased to what level of the USD 900 CNF mark after Ramadan.
Price of H beams begins to increase slightly in the Asian area as well. The Chinese mills' prices for ASEAN for July and August shipment were USD 720 to USD 730 CNF for boron added H beams, USD 760 to USD 770 CNF for small sized H beams, and USD 820 to USD 830 CNF for middle sized H beams. Although the Chinese mills tried repeatedly to increase their prices by USD 30 to USD 40, they were rolled back, and have not attained to increase their prices. Although they proposed USD 15 increase, its price increase by USD 10 or so is said to have been confirmed and to have penetrated consequently. Prices of many sizes are rising, and in case of middle-sized H beams, even the USD 840 CNF level is said to be found.
In Korea as well, prices of H beams seem to be rising. Hyundai Steel noticed to reduce a range of discount on H beams by KRW 30,000 for the domestic to each customer in late July 2011, and is entering negotiations. A suggested price by a mill was KRW 980,000 but a market price was reported to be KRW 960,000 till then. As most recently, its market price is said to be KRW 970,000, they succeeded in reducing a range of discount by KRW 20,000 and accordingly, they can be said to have succeeded in raising its price practically.
In early this quarter, prices of flat rolled products collapsed largely. There were many cases of price drop by as much as USD 200. Against this, prices of shapes and sections did not respond to price hike of steelmaking materials but on the other hand, price decrease of those items was below USD 100, and bottom prices can be said to be stable compared with those of flat rolled products. It has been observed that prices of shapes and sections do not increase unless price of steel scraps rises largely but prices of H beams now begin to go up without big increase of scarp price. In this regard, a market price increase is expected not only in Middle East but also in the ASEAN area subsequently.
However, grounds for concern are also found. It is such movement that in China, construction of railway net works will delay significantly or cease. If construction of railways will delay, production of rails will be reduced naturally. As there are many mills in China which produce both rails and H beams, the mills are expected to shift emphasis of production from rails to H beams. A second of the case that as many cold rolling mills moved into production of non oriented electrical steel sheets coils, its price dropped from the level of 1,000 to that of 700 in dollar volume due to over production is concerned.
Although increase of a market price of H beams is found, there is a feeling that the Japanese mills are left out of a market. It is because under the situation that an exchange rate of USD 1 is appreciated to above JPY 80, negotiations cannot be concluded unless USD 1,000 FOB is accepted. Fortunately, as the Japanese mills will carry out the periodic overhauling of their facilities and so on, there will be no mills to do selling from haste. Therefore, their attitude is to take plenty of time.
(Sourced from TEX Report Limited)
