Shanghai rebar futures falls by 2.7pct

Friday, 11 Nov 2011

China steel futures slid 2.7% on Thursday, its steepest single day drop in three weeks, as investors sold riskier assets amid an escalating debt crisis in Italy, threatening a rebound in iron ore prices after last month's slump.

The most-traded May rebar contract on the Shanghai Futures Exchange closed down by CNY 111 at CNY 4,050 a tonne, after two days of gains.

Asian stocks fell sharply as a political and economic crisis in Italy spurred fears of a split in the euro zone with borrowing costs for Europe's third biggest economy near unsustainable levels and the bloc unable to afford a bailout.

A deepening debt crisis in the euro zone as well as a murky outlook for steel demand in top consumer and producer China could sap a recovery in iron ore prices that have are just starting to stabilize after falling more than 30% in October.

(Sourced from Reuters)

China mills offered cheaper iron ore pricing options-sources

Fri Oct 14, 2011

* Several Chinese mills can buy iron ore based on current spot rate
* Reference period for Q4 rate moves to Oct-Dec from June-Aug
* Follows fall in spot iron ore to lowest since Nov 2010

By Ruby Lian and Fayen Wong

SHANGHAI, Oct 14 (Reuters) - Iron ore miners have given steel mills in top importer China the option to buy the raw material cheaper for fourth-quarter contracts, sources at mills said on Friday, following a fall in spot rates to 11-month lows.

Quarterly contracts are usually based on the average of index-linked spot prices over a three-month period ending a month before the start of each quarter.

But Chinese mills, with margins cut by lower steel prices, are not keen on paying more than $175 a tonne for iron ore -- the fourth-quarter contract rate based on June-August average spot prices -- when the current rate is around $160.

Three sources at Chinese mills briefed on the change told Reuters that iron ore miners, such as top producer Vale SA , have offered Chinese mills the option to pay for fourth-quarter supplies based on more current rates.

"We received a letter from Vale asking us for our opinion of changing fourth-quarter pricing to be based on October-December spot rates," said a source with one of China's mid-sized steel mills.

"Other miners have also said that they would consider steel mills' interests and have therefore made such moves."



Another official with one of China's largest steel mills told Reuters that his company would still buy iron ore based on index, but with the reference period changed to October through December.

A spokeswoman at Vale was not immediately available for comment.

Reuters reported on Thursday that Chinese mills were seeking to postpone shipments or renegotiate fourth-quarter iron ore contracts.

China is the world's biggest buyer of iron ore, the biggest money maker for Vale, Rio Tinto and BHP Billiton which together control around two- thirds of the global seaborne market.

Around 1 billion tonnes of iron ore is traded in the global seaborne market, with about 20 percent sold in the spot market and the rest via long-term contracts.

MORE FLEXIBLE

The debate over pricing options suggests that the quarterly contract pricing system, which the industry adopted last year after scrapping a 40-year-old custom of changing prices every year, may not last for long, traders said.

The industry could soon move to a monthly system to more quickly reflect swings in spot prices, they said.

"Because of the price swings in the spot market, the miners are going to have to be a little bit more flexible with their pricing system," said an iron ore trader in Singapore.

A number of Chinese customers have reneged on their annual contracts in late 2008 in order to source iron ore at cheaper prices following the collapse in the global economy.

Chinese mills have mostly paid lip service to longer-term pricing, citing benefits for the industry's stable development, while they have been willing to switch to spot pricing in the past.

Platts 62-percent grade index prices from June to August stood at an average $175.63 a tonne, down marginally from $176.96 in March-May, the basis for third-quarter pricing.

BHP Billiton, the world's No. 3 iron ore miner, said it has not had any shipment to China cancelled or renegotiated in the last few weeks.

An industry source said BHP has not made changes to its pricing periods as it already prices its ore close to the period of delivery, instead of using previous quarter's prices.

Unlike BHP, Vale and Rio Tinto still price the majority of their contracts on a quarterly basis.

(sourced Reuters)

Steel consolidation now focused on China - Mr LN Mittal

Thursday, 13 Oct 2011

Dow Jones reported that as per the world's largest steel maker’s CEO Mr LN Mittal, China holds the greatest potential for further consolidation within the steel industry following the conclusion of a consolidation spree in developed world such as the US and Europe.

Mr Mittal on the sidelines of the annual World Steel Association said “The potential is only in China. If you go around the geographies there is limited potential" for consolidating assets elsewhere.”

He noted that consolidation has already occurred in regions such as Europe and in the US, the world's second largest steel consuming country after China.

Mr Mittal said Chinese steel consolidation would be led by China's top 10 producers rather than foreign companies.

But Mr Mittal doesn't expect ArcelorMittal will play a role in the consolidation. He said “China is not in a mood to allow foreign companies to increase their presence in the country.”

He expects China's top 10 Chinese steel producers will account for 60% of China's steel output in five years' time and 75% in 10 years, up from 40% to 45% at the moment.

He noted that within five years, Chinese steelmakers may also start to look internationally to expand their operations, which would be positive for globalization.

(Sourced from Dow Jones Newswires)

Siemens to provide rod outlets for wire rod mills of Lianfeng Steel

Tuesday, 22 Feb 2011

Lianfeng Steel Co Ltd based in Jiangsu Province, China has contracted for the supply of rod outlets for new single strand rod mills that will be located in adjacent mill bays in the same building complex in Yonglian Industrial Park in Zhangjiagang City.

The new plant will enable the steelmaker to enter markets for higher quality products. Hot commissioning, scheduled in four phases will begin in late 2011.

The new equipment will enable Lianfeng Steel to produce 5 to 25 mm plain rod and 6 to 16 mm rebar. Products will include quality carbon, carbon structure, low alloy, cold heading spring, bearing steels and welding wire. Depending on the product mix, each strand will produce approximately 700,000 tons per strand per year for both domestic and overseas markets.

The scope of supply for each strand is for engineering and related equipment from the exit of the last main mill train stand through to the reform station, which includes a Morgan horizontal/vertical pre finishing mill, a Morgan Vee pre finishing mill, an eight stand Morgan No Twist mill, a four stand Morgan Rod Reducing/Sizing Mill and pinch rolls and laying head arrangement for each strand.

The contract also includes mechanical, fluid, electrical and proprietary control systems, as well as site supervision for installation and commissioning for both rod outlet strands.

Lianfeng Steel is a subsidiary of the Jiangsu Yonggang Group Co Ltd an integrated iron and steel company. Jiangsu Yonggang produces five million tons per year each of steel and rolled steel.

Baotou Steel clinches cooperation with five ferroalloy producers

Monday, 31 Jan 2011
It is reported that Baotou Iron & Steel Co Ltd one of the largest steelmakers in North China has inked strategic cooperation agreements with five major domestic ferroalloy producers including Sinosteel Jilin Ferroalloys Co Ltd.

As per report, these five ferroalloy producers occupy significant shares in China domestic market with advanced equipments, techniques and processing ability.

Due to rapid development, Baogang demand for ferroalloy products is swelling in volumes, qualities and varieties. The steelmaker is ambitious to expand steel output to 16.5 million tonnes by 2015.(sourced:mysteel.net, for real time access to China steel new)

Iron ore price negotiations - views of BaoSteel group chairman Xu Lejiang

Sunday, 16 Jan 2011

Baosteel Group Chairman Mr Xu Lejiang recently in the interview said “I know you most want to talk about? Iron ore negotiations. Speaking of China Steel Industry, it is indeed a topic around not in the past.”

In Mr Xu Lejiang view the subject of iron ore, like side prism which reflects different aspects of China steel industry:
1. Iron and steel industry for many years without the rapid development of China macroeconomic stability will not get the industrial food strong support
2. Excessive rate of development of steel industry, but also to the industry repeatedly encountered a bottleneck mouth
3. Ore price negotiations face difficulties, eliminate backward production capacity difficult, industry concentration falling instead of rising, core technology and the introduction of The Road barrier.

He said "Extensive development of China steel industry, the old road has come to head, mouth bottleneck is a breakthrough. In steel production has accounted for more than half the global total today, China's steel industry from large to strong adjustment and transition will certainly be the result.”

From the iron ore difficult situation in inverted extract a competitive edge, International iron ore pricing mechanism of change is this year hits one of the highest financial events. Mr Xu Lejiang said is the world's three major Mine Monopoly enterprises with stage in short supply, resulting in such a situation.

He said “Late last century, the global iron ore supply exceeding demand, integration of the advantages of the three ore mines were relatively monopolistic market position. This century, the Chinese steel output rose rapidly from 100 million tons last year, 568 million tonnes Global steel production rose from 700 million tonnes more than 1.3 billion tonnes. Mines and steel mills as the upstream and downstream, the development pace of inconsistent supply and demand balance for the time being to break the iron ore price agreement mechanism for long-crumbling.”

He said “In this difficult situation of iron ore, on one hand of course, there are three major mines just today, not tomorrow, seeking short term interest factor, which will be the test of history is not permanent, but the other On the one hand, also reflects the low concentration of Chinese iron and steel industry, steel demand in different inconsistency issues such as trade order will not ring true.”

He added “The ore pricing mechanism changes, the Baosteel and other Chinese steel mills have brought no small impact on the future ownership of the steel to different starting line in a competition is a challenge and an opportunity make their own forced out really competitive, reflected. Similarly, the hot metal to produce different quality, different value added products. Who steel making capacity, who will be able to produce good products, you can win the market competitiveness.”

He concluded “Forced mechanism will extract a Chinese steel industry walk up the resources of security system. Baosteel as early as the beginning of this century mining downturn, the CVRD and Rio Tinto and other miners venture Cooperation Lock mine some interest, to some extent the interests of achieving a hedge. Ore prices skyrocketing in the present case, there will be new investors into the mining industry and a round of going out the formation of new iron ore supply capacity, the global ore trade pattern will return to a win win situation.”

Courtsey news by business.ezinemark.com

Tianjin imported iron ore quotations keep firm

It is reported that imported iron ore quotations in Tianjin market kept firm with transactions turning better.

Currently, 63.5% Indian fines at Tianjin port is settled at CNY 1290 per tonne to CNY 1310 per tonne, PB fines is quoted at CNY 1240 per tonne to CNY 1250 per tonne, PB lumps is fixed at CNY 1350 per tonne to CNY 1370 per tonne, 61% Indian fines stands at CNY 1160 per tonne to CNY 1180 per tonne, 58% Indian fines is priced at CNY 1000 per tonne to CNY 1020 per tonne, 64.5% Brazilian coarse fines is posted at CNY 1320 per tonne to CNY 1340 per tonne.

Given limited fluctuating scope in steel market, enhanced buying interests of steel mills and tight iron ore supply, Tianjin imported iron ore market may go up amid steadiness with transaction upturn.

Sourced www.Mysteel.net Sunday, 09 Jan 2011

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