WEEKLY SUMMARIZATION OF WORLD STEEL MARKET FOR FEB.10-17, 2012

— 21-Feb-2012

Except stabilization seen in American market, small-ranged declines occupy the other markets.

Global Steel Price Index by February 17

I North American Steel Dynamics

Under the context of hiking scrap prices and better demand turn, the U.S. steel market prices amount up since the dip happens in last November. During this period, leading steel manufactures have upgrades prices for many times, and the price spread between the U.S. and Europe enlarges gradually. Lots of overseas suppliers leap into the trend to add imports to America, and certain imported HR coil have been seen at the market.

For this year’s price, the America International Iron & Steel Association (AIIS) holds a cautious optimism towards the future trend, believing that the U.S. economy would not see a double dip and the GDP is to maintain a growing momentum as the construction industry turning better and automobile demand going strong. Standard & Poor also deems the future positively. This company predicts steel industry’s sales and profit are to increase in 2012, with a higher steel price.

Nucor will keep most of its carbon steel plate price for March unchanged, while the hot-rolled plate price is to see a rise of USD40 per tonne, to be valid for orders in this week. Moreover, SSAB proclaims to lift the spot prices for hot-rolled products by USD40 per tonne as well, to be executive on March 4.

Capacity utilization rate: during the week ended by February 11, the U.S. produces crude steel of 1.929 million net tons, up 8.4 percent year on year and 1.2 percent from one week earlier, and at a capacity utilization rate of 78.1 percent. During the week ended by February 4, the U.S. produces crude steel of 1.907 million net tons, at a capacity utilization rate of 77.2 percent. After the adjustment and until February 11, the U.S. crude steel production year to date totals 11.419 million net tons, a yearly increase of 6.1 percent with a capacity utilization rate of 77.0 percent.

Exports: according to the statistics issued on Monday by the AIIS, the U.S. exports 1.201 million tonnes of steel in last December, sliding 2.4 percent from the prior month while climbing 29.4 percent year on year. For the year of 2011 as a whole, this country’s exports total 13,454,195 tonnes, a yearly increase of 12.1 percent 0.16 percent higher than that in 2008.

II European Steel Dynamics

European steel enterprises suffer huge shock in the fourth quarter of 2011, when confronting a double strike from soft demand and dropping prices. The number of shut-down mills amount to 10 though, profits for the whole year is largely eroded. ArcelorMittla proclaims a deficit as much as EUR569 million in carbon plate operation for the fourth quarter of 2011; ThyssenKrupp claims to be EUR357 million for the fourth quarter; SSAB’s loss reaches EUR248 million and Tata Steel sees a loss of EUR147 million at European markets for the fourth quarter.

Russian steel mills’ production arrangement on HR coil for March is lifted by USD10-20 per tonne. Severstal’s steel resource supply for March is quoted as USD640-650 per tonne (FOB St. Petersburg), USD20 per tonne higher than resources exported in February. HR coil exports arranged to produce in March is priced at USD625-640 per tonne (FOB, Black Sea), USD10 per tonne high than those in February. Zaporizhstal, a Ukrainian mill, also lifts its quotation on HR coil by USD15 per tonne to USD600-615 per tonne for March. Turkey’s exported steel bar in February drops USD20 per tonne to USD700-710 per tonne (FOB, main ports in Turkey). At present, Turkey is struggling to acquire orders but seeing a sluggish transaction.

III Asian Steel Dynamics

Japan: order for steel in 2011 is 68.88 million tonnes, descending 3 percent from the prior year, constituting the second consecutive year of drop. The main reasons for this scenario are stronger yen and floods in Thailand. The steel export volume for Japan in 2011 stays 25.02 million tonnes, plummeting 7.9 percent when compared with 2010, which is the first negative growth seen in three years.

Profit incurs sharp slipping. In the fiscal year of 2011, Nippon Steel might see a profit dropping rate of 47 percent to JPY120 billion (USD1.566 billion). JFE presumes its loss would be JPY40 billion (USD522 million) for 2011. Sumitomo is to confront a loss for straight three years, hitting JPY55 billion (USD722 million) for the 2011 fiscal year.

An insider said that, steel market price is still under dumping pressure. When demand stays bleak, supply is growing. Japan Yen must depreciate 10 percent if exports benefit is to ensure. Nippon predicts steel price trend in 2012 is to maintain in low, for global mills are competing for limited orders.

South Korea: hot-rolled production in January of POSCO, Hyundai Steel and Dongbu Steel is 1.395 million tonnes, decreasing 4.1 percent from last December and constituting a drop for consecutive three months, so does sales volume for these three mills.

Sales volume for the the three mills in January

For Japan & S. Korea’s negotiation on shipbuilding plate, the price of the first quarter descends USD60 per tonne from the prior one, while the plate produced by South Korea its self is sliding USD70-80 per tonne.