November 22, 2008

Chinese steel mills hike CR export offers

It is reported that Chinese steel makers have raised export quotation for cold rolled steel coil again to reflect the increase in domestic market price. Despite the remarkable increase there is not much allocation for exports.

CRC prices has jumped by USD 40 per tonne to USD 50 per tonne from end May and the strength is likely to continue in June. Export offer for 1.0mm CRC is prevailing at USD 1120 per tonne FOB and some are tagging at higher level.

Shanghai based trader said "There is less allocation than expected and even private steel makers have been almost fully booked. It is not easy to get material even at high price level."

As per report, the increases in domestic market prices are believed to be the major driver of the strength of export offers. On Shanghai market, price for 1.0 cold rolled sheet by Anshan steel is being offered at CNY 7350 per tonne, while that for 1.0mm CR coil by Maanshan steel is at CNY 7250 per tonne.

Mysteel forecasts Shanghai price for 1.0 sheet by Anshan steel is close to our target of CNY 7400 per tonne to CNY 7500 per tonne and the next one probably will be CNY 7700 per tonne to CNY 7800 per tonne and it could go past CNY 7500 per tonne. Otherwise, we could exclude the possibility of downward correction.

(Sourced from MySteel.net)