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Nippon Steel & Sumitomo Metal expects China steel prices to hold firm this year

Steel News - Published on Fri, 17 Feb 2017

Image Source: Reuters
Reuters reported that Nippon Steel & Sumitomo Metal, Japan's biggest steelmaker, expects steel prices in top consumer China to hold firm at least until its Communist Party congress late this year, amid solid demand that is underpinning coking coal and iron ore markets.

Nippon Steel executive vice president Mr Toshiharu Sakae told Reuters in an interview that "Steel demand and prices in China have been fairly strong on the government's stimulus. I expect this trend to continue for a year as Beijing will work hard to support its economy ahead of the Congress, referring to China's 19th Communist Party Congress that is expected to be held late in the second half of 2017.”

He said that "My guess is that coking coal prices will stay at USD 150 to USD 200 a tonne as China is said to be trying to cut market volatility, adding that iron ore prices may move towards USD 90 a tonne on a free-on-board basis on hopes that China's imports grow.”

Mr Sakae further said that China's iron ore futures hit their highest in more than three years this week, amid solid steel demand. To offset rising costs, Nippon Steel has sought to increase product prices by around JPY 20,000 (USD 174.73) per tonne this financial year, but will need more hikes next year.

He said that the high materials costs have squeezed margins and it is difficult to make the capital expenditure needed to maintain high quality and the swift delivery of products.

Source :

Posted By : Rabi Wangkhem on Fri, 17 Feb 2017
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