WEEKLY SUMMARIZATION OF WORLD STEEL MARKET FOR FEB.03-FEB.10/2012

— 14-Feb-2012

Global steel market this week shows an uptrend when maintaining largely stable. Therein the U.S. steel plants keep pieces unchanged while scrap prices going down. European HR coil and medium plate prices continue moving up, so do South Korea’s rebar and CR products.

Global Steel Price Index by February 10

I North American Steel Dynamics

Nucor Steel maintains its most carbon steel price unchanged for March, while uplifts its heat-treating plate by USD40 per tonne for March, to be valid on orders delivered this week. No signs appear that demands for plate is decreasing in the U.S., especially those from heavy equipment and energy resources. It may attribute to increasing import resources and lower scrap prices, Nucor keeps the quotation for March stable though demands turn stable. Medium plate from Asia to southern cities comes to as low as USD740 per tonne, delivered in April. Import license application also reflects growing imports. The application on steel plate and alloy plate reaches 93,769 tonnes in January, up 14.9 percent form one month earlier.

Scrap prices go down in the middle February, H1 scrap in Pittsburg, Chicago and Philadelphia is averaged at USD 404.17 per long ton, sliding USD28.33 per long ton from last week. Larger imports and lower scrap prices squeeze the increasing room. Mills’ quotations at present are firm, at USD940 per tonne (FOB), and some mills even quote higher.

Capacity: Nucor plans to inject USD290 million to its special bars and wire rods product, enlarging the capacity of which by 1 million tonnes. Pushed by the U.S. manufacturer’s development (including energy, automobile, heavy truck and heavy equipment), bars for project use is in strong need. And it is presumed that special bars market keeps a growth momentum in near future.

Capacity utilization rate: during the week ended by February 4, the U.S. produces crude steel of 1.907 million net tons, up 6.9 percent year on year and 0.5 percent from one week earlier, and at a capacity utilization rate of 77.2 percent. After the adjustment and until February 4, the U.S. crude steel production year to date totals 9.94 million net tons, a yearly increase of 6.1 percent with a capacity utilization rate of 76.8 percent.

II European Steel Dynamics

European traders predict that the local HR coil price is to rise for the consecutive third week. The transaction prices are maintaining at EUR550-560 per tonne (USD720-733 per tonne), and it is anticipated that mills are to push up their quotations later. Although prices are on an up-term, market demands remain relatively soft. HR coil import price for Europe is EUR600-620 per tonne (CFR), delivered in April.

Galvanized sheet price at Europe market presents a small drop. Traders’ quotations for this are EUR620-645 per tonne, descending EUR5 per tonne from the prior week. Import price on hot-dipped galvanized sheet ranges from EUR640 to 660 per tonne. China and India quote EUR500-600 per tonne for medium plate delivered to Europe (CFR).

In line with the Outlook on Steel and Economy Market for Q1 of 2012-2013 issued by the Europe Steel Association, the EU steel imports for the second half of 2011 decrease. Counted by the volume, Russia and Ukraine take a large share on exporting to the EU, while China shares 60 percent in the organic coating sheet field. The EU has initiated anti-dumping investigation on China’s organic coating sheet already. It is estimated by EUROFER that, the union’s imports in 2012 is to cut 11 percent, and the situation will turn better in 2013.

III Asian Steel Dynamics

Japan and South Korea: when Korean mills ask higher by KRW30,000 per tonne, spot price for rebar in South Korea starts hiking. 10mm rebar for now is transacted at KRW830,000-840,000 per tonne, ascending KRW10,000-20,000 per tonne from last month. POSCO upgrades cold-rolled products prices by USD20-30 per tonne. At present the mill is carrying on the negotiation on cold-rolled products for March-April. Contract prices for cold-rolled products delivered in March and April is USD730 per tonne (FOB), for hot-dipped galvanized sheet is USD700-800 per tonne and for galvanized sheet is USD800 per tonne.

Asian countries are to negotiate with the Middle-East and Latin American countries on HR coil. It is hopeful that the transaction price come to USD700 per tonne (C&F) for HR coil delivered in March-April. Feedbacks form prevailing market goes that the Middle-East inventory is low, hence traders there may accept Asian mills’ quotation rise.

POSCO and Hyundai Steel Service Center report a HR coil inventory of 151,000 tonnes at present, down 15.1 percent compared with early January, marking a eighty-month low. Insiders indicate that the recovering demand contributes the most for lower inventory. Meanwhile, POSCO’s output is cut to 100,000 tonnes or so from 110,000 tonnes in late December. Hyundai Steel’s output is down to 51,000 tonnes in late January from 55,000 tonnes in the early. According to Korea Iron & Steel Association, this country imports cold-rolled products by 1.53 million tonnes, increasing 61.4 percent year on year. Therein products from China account for 57.9 percent in its total imports.

Other markets: large price separation shows in Taiwan rebar market, ranging from TWD19,500 per tonne to 19,800 per tonne. Influenced by larger demand from construction industry, Sail Steel’s quotation for longs rises 3,000 rupee per tonne, to be valid on February 1.