TEX reported that the stainless steel export market for Ni based CR sheets is shooting up in East Asia before the lunar New Year holidays in China and elsewhere, a complete change of the environment.
For an indicator, the export market has advanced by USD 200 to USD 300 per tonne since the beginning of this week. There are expectations among the parties concerned for a solid upswing in market prices this time if LME nickel prices stand at the current level even after the lunar New Year holidays.
LME nickel prices hit USD 12 per pound late last week, which brought a jump in bids in East Asia by various customers for Ni-based stainless CR sheets. As a result, the existing bids represent a price level of USD 3,500 to USD 3,600 per tonne C&F. None of the customers reacted earlier when offer prices amounted to USD 3,200 to USD 3,300 per tonne C&F or beyond before an upswing in the LME nickel market. The customers look poised to purchase what they require, anticipating a pass along in Ni based stainless steel prices.
The following are an overview of how things stand with stainless steel deals in East Asia:
Japan - Until now, various stainless steel manufacturers have stopped offers in negotiations on their export deals of Ni based CR sheets for shipments to Asian destinations. They are contemplating negotiating their export deals at a price level of USD 3,700 per tonne C&F after the lunar New Year holidays. They describe the new price level as essential to offsetting the increased nickel cost. Until recently, they were trying to settle their export deals at a price level of USD 3,600 per tonne C&F. From a managerial standpoint, it is considered desirable for them to seek a higher price level of USD 3,800 per tonne C&F. But it is a matter of attention whether they can win a price increase of that level despite an advance in the stainless steel export market.
South Korea - POSCO has announced the decision to keep its domestic sales prices unchanged of stainless steel products for February 2011 shipments. The decision is contrary to Japanese stainless steel producers' forecasts that POSCO would execute a domestic price increase of KRW 200,000 to KWR 300,000 per tonne for Ni based stainless sheets. POSCO is believed to have opted for flat domestic prices of stainless steel products to cooperate in the South Korean government's commodity price control or to fight inflows of stainless steel imports. As to export sales, POSCO was once conducting its deals of Ni based stainless sheets at around USD 3,450 per tonne C&F, prices that have ceased to exist until now.
Taiwan - Various stainless steel producers have increased their domestic sales prices of Ni based CR sheets by TWD 3,000 to TWD 6,000 per tonne for February shipments. It is understood that the price increases apply to base prices, with a diminution of the volume discount. As a result, the new prices are viewed as amounting to a higher level than what South Korea's POSCO currently charges for its domestic sales of Ni based stainless CR sheets.
China - Taiyuan Iron & Steel Group Co sets its February sales price of Ni-based stainless CR sheets at CNY 26,800 per tonne after tax. The asking price is identical with the current Wuxi stainless steel market for Ni based CR sheets. A bullish market sentiment is reported for local deals of stainless steel products.
In the West, meanwhile, transaction prices of Ni based stainless sheets are thought to have already moved up to a level of USD 4,000 per tonne. In Europe, the current prices are estimated at a level of USD 4,300 per tonne after an increase each in the nickel surcharge and the base price. It is considered certain that European prices of Ni based stainless sheets will further advance because the existing nickel surcharge is settled on a benchmark nickel price of USD 11.30 per pound in January. In the USA, the current prices are estimated at a level of USD 4,180 per tonne. But it is likely that US stainless steel producers will execute a domestic price increase of around USD 300 per tonne for March shipments since the existing nickel surcharge is settled on a benchmark nickel price of USD 10.90 per pound in December 2010.
In 2010, LME nickel prices peaked at USD 11.86 per pound in April when the going prices of Ni based stainless CR sheets for export stood at a level of USD 3,500 per tonne C&F in East Asia. At present, the stainless steel export market there for Ni based CR sheets has begun to top its peak last year, with the LME nickel market at a level of USD 12 per pound. As a result, even Taiwan's stainless steel producers are poised to become bullish in what they sell. Until recently, they were taking a bearish view of the market prospects because of excessive product stocks at their works.
(Sourced from TEX Report Limited)
