TEX reported that the Chinese and Taiwanese austenitic stainless steel mills seem to have reduced sharply their production in June 2012.
Production quantity of them in June 2012 is not known yet but at present, it is said that in Taiwan, Tang Eng Iron Works, YUSCO and so on are carrying out production cut by nearly 50%, and in China as well, Baoshan Iron & Steel is said to be addressing 50% reduction in production.
It is not sure whether POSCO of Korea is now reducing its production but the company is said to make periodic revamping of its facilities for about one week in July 2012 and if so, production is predicted to be cut to such an extent.
If such production cutback is surely performed, there is a possibility that the bottoming out of cold rolled austenitic stainless steel sheets will be accelerated. Those inventories (total of hot and cold rolled stainless coils sheets) in the Wuxi market of China have fallen below 190,000 tonnes and although prices of cold austenitic stainless sheets are dropping to CNY 18,200 to CNY 18,500, price down of them is slowing. Taiyuan Iron & Steel noticed its July prices, and reduced them by CNY 600. The quantity discount range of the company is said to be CNY 600 and when such discount is reduced, its prices becomes similar to those in the Wuxi market. The company possibly aimed to bottom out by matching its prices to the market ones.
Although POSCO has not changed its list prices, it is said to be thought to move to virtual price increase by reducing its discount range. It is because in Korea, purchasing prices of raw materials of stainless are increasing due to the weak won, and such price hike is forced to be passed on. If virtual price increase is penetrated, it is seen to lead to the market recovery.
In the export market, prices of cold austenitic stainless sheets dipped below USD 2,700 CFR, and are coming close to USD 2,600 CFR. Demand has not recovered yet but such conditions begin to come out that the situation won't be surprised if the bottoming out is becoming in sight any time now. If the nickel price rises, it will be sure that momentum of turning around increases.
In the European market, the surcharge has been raised from EUR 1,417 to EUR 1,418 despite of price drop of nickel. The weak euro seems to affect it. The base price is seen to be EUR 1,100 and its total price is the level of USD 3,100 in dollar conversion. In the USA as well, those prices are seen to be around USD 3,100 which stands out from being sluggish in the Asian area.
Meantime, in case of the Japanese mills, when the yen is appreciated to more than JPY 80 against the dollar, unless otherwise prices of austenitic cold stainless sheets become more than USD 3,000 CFR, the situation becomes no meaning to sell. As they are not able to follow the market for the time being, they have suspended to make an offer, and have continued a wait and see stance.
Source - TEX Report Limited
(www.steelguru.com)
