It is reported that Japanese integrated steelmakers are expected to start negotiations this week on their export deals of tinplate and TMBP for shipments to Asian destinations in the April to June quarter of 2009. The Japanese steelmakers have yet to work out the terms of separate offers.

As to tinplate prices, China's Baosteel Co Limited executed a domestic price reduction in the equivalent of more than USD 100 a tonne each for November shipments and January shipments. As a result, moves to hold back on new purchases pervaded Asian customers for tinplate exports out of Japan. On their part, the Japanese steelmakers were forced to execute a considerable price reduction in their tinplate exports to Asian destinations for shipments in the January-March quarter of this year, with a fall in tinplate demand for cans. In the background, too, were low-priced tinplate exports to Southeast Asia by the competition such as Chinese steelmakers.

Under the existing circumstances, the current prices of Japanese tinplate exports indicate a fall of USD 200 to USD 300 per tonne FOB from what prevailed in the latter half of last year. In this connection, HR coils for TMBP are currently selling at around USD 600 per tonne FOB, while the going prices of HR coils for building materials stand at a level of USD 500 per tonne FOB, half the earlier norm.

Japanese steelmakers have reduced prices in Asian deals for tinplate and TMBP exports for January to March 2009 period shipments, which they describe as a price revision that anticipates a fall in prices of raw materials imports for fiscal 2009. Therefore, they are contemplating giving the Southeast Asian users an explanation of why the Japanese steelmakers cannot respond to any request for a price reduction for April to June 2009 period shipments on grounds of a fall in raw materials prices.

As far as China is concerned, the Japanese steelmakers are on track to offer increased prices of tinplate and TMBP exports there for April to June shipments. They find it necessary to correct the present spread of as much as USD 300 per tonne between negotiated prices for shipments to China and Southeast Asia. In East Asia, meanwhile, Thailand's Siam Tinplate Co and China's Hainan Haiwoo Tinplate Co are scheduled to commission a new tinning line each at their works in 2009, assuming that the new capacity is used in tinplate production for export. Still, it is uncertain whether both tinplate manufacturers can move into export markets for tinplate during this year.

(Sourced from TEX Report Limited)