The day after the export rebate cancellation announcement coming out, the hot rolled coil price began falling in the Shanghai market. Although Chinese steel traders are not optimistic about the future, they believe that RMB4000/tonne is the bottom price of hot rolled coil.
The steel export rebate cancellation is really bad news to the Chinese domestic market, as steel export will encounter more difficulties and export volume will decrease. As a result, more steels have to be consumed in the domestic market, which means the supply and demand contradiction will be intensified further. Certainly, the current situation is against Chinese steel market. In the short run, the hot rolled coil market is also influenced, so the price may continue to go down.
However, it is widely expected that hot rolled coil price will not fall sharply in the future, as the present price almost hits the bottom.
July 1, There appears to be no let-up from a weak steel market. Producers are contemplating downward price adjustments for July, though some think they can manage.
We are yet to decide, but may roll over,” said Jayant Acharya, Director (Sales and Marketing), JSW Steel. Another cold-rolled steel producer said prices could be cut by Rs 1,000-2,000 a tonne.
Prices of hot-rolled coil (HRC), a benchmark for flat steel, used by automobile and white goods makers, are Rs 32,000 a tonne, down by Rs 2,000 over the past month.
Excess capacity, coupled with a weak demand, appears to be the triggers. The only way the downward spiral could be stopped was by cutting production, said a producer. “We produced 30 per cent less this month than the previous, but the industry needs to do it,” he said.
India’s production capacity is 60 million tonnes and most companies are at 100 per cent capacity. The global capacity utilisation ratio, however, slightly declined to 82 per cent from 83.4 per cent in April, according to the World Steel Association.
July 1, It is reported that some of the mines owner in eastern part of India have reduced their ore prices by upto Rs 800/MT, looking at weak demand in the domestic market.
“It was much awaited price cut; we have been anticipitaing it from past one month. It is good for the steel industry, prices are likely to get stable soon, said one the manufacturers based in West Bengal”
Hyderabad: State-owned mining major NMDC has increased the prices of Iron ore fines by 11% or Rs 300 per tonne. With this, the price of ore would be Rs 2,900 per
tonne compared with Rs 2,600 per tonne
“This will have a significant impact on our bottomline,” S Thiagarajan, NMDC’s director-finance, told DNA.
Of about 22 million tonnes of the Iron ore the company dispatches, about 60% is in the form of fines.
“There is not going to be any impact on the steel prices with this hike since the steel makers are aware of the price hike and they had factored in the possible hike into their costs,” he said.
The prices of the company will now be reviewed every quarter.
The company recently hiked the prices for its overseas customers primarily in Japan and South Korea. NMDC, which sold about 15% of its output overseas last year, will export fines with 63% iron content at about $122 a tonne.
The Shanghai stock index plunged by more than 4% yesterday due to the concerns of slow economic growth on the second half and tightening monetary policy.
And the physical Iron ore continued its weak sentiment with abundant offers. 62/61 was offered at $126 level with few interests. Sources said the Steel mills are seeking to purchase Iron ore from the port at the moment.
The Iron ore swap prices reflected the concerns on the future demand, down by 5 dollars, with Q3 trading at $125 yesterday
Steel prices have fallen in the past few months due to global de-stocking but it should stabilise in the long-term, a top JSW Steel official said on Tuesday.
“Steel prices have fallen in the past few months due to global de-stocking. However, the prices should stabilise in the long-term,” JSW Steel managing director Sajjan Jindal told shareholders at the company’s annual general meeting in Mumbai.
“Steel use in the country is increasing but the actual demand for steel is still the same,” he said. Describing the increase in cheap steel imports as “disturbing” Jindal said that this along with higher iron ore exports will put the local steel industry at a disadvantage.
“We will try to impress upon the Government to take steps and implement policies which will arrest this trend,” he said. When asked whether JSW Steel was impacted due to an increase in input costs, the company’s Director (Sales & Marketing) Jayant Acharya, said, “we are trying to stabilise the input costs’ impact.”