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China's major transformer maker to visit Japan - TEX

Steel News - Published on Thu, 26 Mar 2015

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According to a source, a purchasing team of some Chinese leading transformer manufacturer is expected to visit Japan shortly to meet Nippon Steel & Sumitomo Metal and JFE Steel.

Its purpose is to purchase grain oriented electrical steel sheets to high grades from Japan. Both mills have had a business relationship in the past, and some mill receives a visit from that company for the first time in 3 years. Due to a lack of high-grade GO sheets in China, the company is to negotiate directly with the Japanese blast furnace mills.

The Chinese Government is showing a stance to maintain the economic growth rate at the level of 7% this year. However, in order to avoid wasteful investments, the Government has a policy to focus on investments leading to the steady growth. It is said that one of its most important investments is to upgrade electric power grids. It is to construct power distribution grids to supply electricity from west to east with a high voltage direct current feeding system.

The Chinese Government is said to plan construction of 3 HVDC feeder lines a year from now on. It is reported that 4 electric lines have been constructed in the past. Many transformers are used for a line, and around 15,000 to 20,000 tonnes of high grade GO sheets are seen to be used for one line. Accordingly, 45 tonne to 60 tonnes of high grade GO sheets will be necessary for 3 lines. The more the efficiency of a HVDC feeding system improves, the more the highest grade GO sheets are necessary to be used. Companies to have a track record for China are only Japanese 2 mills and Korea\'s POSCO.

In China, Baoshan Iron & Steel (Baosteel) and Wuhan Iron & Steel WISCO) are producing high grade GO sheets. Domestic supply is likely to have been enough by both mills, and there had been even a movement to file an antidumping case to limit Japanese GO sheets.

However, amid a worldwide increasing demand for high grade GO sheets, it looks somehow as if the Chinese market were to ignite demand for such grade GO sheets at the end. Baosteel and WISCO have raised their domestic prices of GO sheets since June last year by a total of more than USD 1,000 till April shipment. Of these, USD 600 were raised from January this year to April shipment. It gives evidence how demand is drastically increasing from the beginning of this year.

Prices of high grade GO sheets are rising worldwide, and Japan\'s export prices are basically around USD 2,800 FOB at present. However, those prices for China are exceeding USD 3,000 FOB. It is because they focus on securing quantity at high prices.

Source - The TEX Report

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Posted By : admin on Thu, 26 Mar 2015
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