Iron Ore-China market still slow as traders stay away

Thursday, 05 January 2012

Spot iron ore prices in China were mostly unchanged on the first trading day of 2012, with buyers and sellers unable to find a reason to rush back from a two-day new year break.
The offer price of 61.5 percent Pilbara fines, including cost and freight, stood in the $136-139 per tonne range on Wednesday, unchanged from the last trading day of 2011, industry consultancy Umetal said. Analysts said there was little to entice buyers back into the market, with steel demand low and ore inventories generally sufficient to keep mills running.
"What concerns me a little bit is that Chinese mills seem to have restocked over the last three to four weeks without really pushing the price up at all," said Graeme Train, commodity analyst with Macquarie Securities in Shanghai.

Activity normally slows ahead of China's lunar new year, and many traders have expressed hope that the market will improve when the week-long holiday ends on Jan. 30, but the lull could last longer than that, said Train. "It seems everyone is waiting for some signal that things are going to get meaningfully better but the government has been very slow to send a very positive signal," he said.

"There is really no catalyst, and we are probably looking at two very quiet months at least."
Analysts played down the impact of India's decision to raise export tariffs in order to guarantee supplies to domestic users, saying the influence of the world's third-biggest iron ore producer had already been on the wane.

India announced this week that it would increase iron ore export tariffs from 20 percent to 30 percent in an effort to guarantee supplies for domestic users.
"I can't see demand strong enough in 2012 to make global supply and demand tight enough to bring Indian marginal producers back into the market, so I can't see it supporting higher prices," said Sebastian Lewis, head of data and analytics with Steel Business Briefing in Shanghai.
"More likely it will accelerate the trend in declining Indian exports and Australia and other miners will be the beneficiaries," he said. Umetal said Indian 63.5/63 percent iron ore was being offered at $143-146 per tonne on Wednesday, also unchanged.

It added in a research note that the decline in Indian iron ore export volumes had already been offset by growing shipments from South Africa, Iran, Canada and Russia.
While India remains China's third-biggest supplier after Australia and Brazil, its market share has been in decline. In the first 11 months of 2011, India's total shipments of 63.3 million tonnes represented 11 percent of the total, down from 15.6 percent in 2010.

Deliveries from South Africa, Iran, Canada and Russia reached nearly 73 million tonnes over the 11 months, up 33 percent compared with the same period of the previous year.
The most traded steel rebar contract on the Shanghai Futures Exchange ended Wednesday at 4,159 yuan ($660) per tonne, down 51 yuan per tonne or 1.21 percent from the previous session.
Source: Reuters

Iron ore may remain below USD 140 as Chinese mills limit purchases

Tuesday, 20 Dec 2011

Bloomberg quoted Mysteel.com said iron ore prices may remain below USD 140 per ton as Chinese steel mills, the world biggest consumers limit purchases on profitability concerns.

Mr Chen Zhenxing a Shanghai-based analyst at the research firm “Iron ore above USD 140 may force steelmakers to incur losses at current steel prices. Prices may trade between USD 133 and USD 140 before the week-long Lunar New Year holiday which starts Jan 23.

He said that “Mills and traders are short of capital around the year end and that will also curb their buying activities.”

He added that “Steelmakers are trying to keep their raw-material inventories thin because the prices are increasingly volatile. They’d rather order only one or two ships from miners for the holiday and buy the rest from the spot market at ports.”

Ore prices have rebounded 13% from a year low on October 28. Prices have averaged 15% higher than last year USD 147 a ton. Steel prices have declined 11% from this year high in January.

(Sourced from Bloomberg)

Iron ore inventories dip in China

Thursday, 15 Dec 2011

Xinhua quoted according to the Xinhua-China Iron Ore Price Index released on Tuesday that inventories of iron ore at 25 major Chinese ports dipped 0.75% WoW to 99.6 million tons in the week ending on December 12.

According to the index it was the first time in a month for iron ore supplies to fall below 100 million tonnes with last week inventories down by 750,000 tonnes. The price index for 63.5% grade imported iron ore dropped 1.36% to 145 points in the week while 58% purity iron ore imports remained unchanged at 119 points.

According to Xinhua analysts a decline in crude steel output dampened buying enthusiasm among most steel manufacturers and iron ore traders, who are still waiting to make a move in light of possible price fluctuations in the future.

According to customs data, China steel exports stood at 45.16 million tonnes between January and November up by 13.8%YoY while steel imports fell 4.2%YoY to 14.39 million tonnes.

Currently, China domestic iron ore is cheaper than imports, putting Chinese steelmakers in a position to limit their purchases of raw materials particularly from overseas.

(Sourced from Xinhua)

Iron Ore-Upward momentum intact on tight supply, demand

Wednesday, 16 November 2011

Limited supplies and sustained buying interest from top consumer China lifted spot iron ore prices for an 11th straight day and the market stayed well bid on Tuesday, suggesting the upward momentum may not lose steam soon.

Firmer Chinese steel futures this month helped iron ore rebound from a more than 30 percent slide in October, encouraging steel mills to replenish run-down inventories of the raw material.
Iron ore with 62 percent iron content rose 0.4 percent to $138.30 a tonne on Monday, the highest since Oct. 24, according to the Steel Index.

Iron ore has gained 18.3 percent over the past 11 trading sessions.
"We're getting regular inquiries from China for cargo, from steel mills and traders and there isn't a lot available out there," said an iron ore trader in Shanghai who sells mostly Indian material to Chinese buyers.

Iron ore supply in the spot market has thinned with fewer tenders from Australia and Brazil, the world's two biggest iron ore exporters, while shipments from third-ranked India remain disrupted by logistical problems and the government's crackdown on illegal mining, traders said.
"Some of the sellers also feel that the market is rising and a lot of people are going to ask them for cargo so they want to hold off for a bit to get better prices," said the Shanghai trader, adding that prices may go up another $5-$10 from current levels.

Some buyers are bidding $148 a tonne, cost and freight for Indian high-grade 63.5/63 iron ore fines, said Dhruv Goel, managing director at Steel Mint in India's eastern Orissa state.
That is well above the offer price on Tuesday of $142-$145 a tonne of the Indian material in China, according to Chinese consultancy Umetal. Offers for Australian and Brazilian ore rose a further $1-$3 a tonne, Umetal said.

Despite rising prices, many Indian exporters, whose costs are inflated by export tariffs and high railway freight rates, are unwilling to sell at current levels, traders said.

Including freight, the cost of producing 63.5/63 grade in India is about $145-$150 a tonne, the Shanghai trader said. "It doesn't make sense to export at a loss. The mine owners can sell it to the domestic market where the return is better," he said.

Signs of easing credit conditions in China, particularly towards small and medium sized enterprises, may be helping steel prices recover some ground with product inventories at Chinese mills back to near recent lows on a days-of-supply basis, Commonwealth Bank of Australia said in a note.

"Declining inventories might reflect a combination of some production cuts, much lower pricing, better access to credit for SMEs and robust underlying demand," the bank said.

"To the extent underlying steel demand remains robust and credit conditions continue to ease in a 'targeted' fashion, we see China's commodity demand and prices as reasonably well supported."
The most-active May rebar contract on the Shanghai Futures Exchange eased 0.8 percent to close at 4,157 yuan a tonne on Tuesday, after two sessions of gains. Despite the loss, rebar is up 0.6 percent so far in November after three months of decline.

Source: Reuters

Iron ore seen extending advance on Chinese steelmaker demand

Tuesday, 15 Nov 2011

Bloomberg cited Mr Michael Heffernan a client adviser with Austock Securities Ltd as saying that iron ore may extend its increase this month as steelmakers in China, the world’s biggest consumer, return to the market.

He said that “The current recovery is a reaction to the decline last month. It comes down to sentiment. You can detect a more positive air in the market than there was earlier this year.”

Mr James Glenn commodities analyst with National Australia Bank Ltd in Melbourne said “There was probably a bit of an over-correction last month, so the market has responded. Buyers had been sitting back and now they’re seeing an opportunity to take advantage of the lower price.”

He said that Rates may hover from USD 130 to USD 140 a tonne for the rest of the year. Iron ore for immediate delivery at Tianjin port gained USD 2.90 or 2.2% to USD 137.70 on November 11.

Steel-product exports from China climbed 11% to 41 million tonnes in the first 10 months, while iron ore imports gained 11% to 557.9 million tonnes.

(Sourced from Bloomberg)

China imported iron ore stocks up 1.5 pct in week ending Nov 11

Sunday, 13 November 2011

Inventories of imported iron ore at major Chinese ports rose 1.5 percent this week to end at 96.3 million tonnes, up for the fourth consecutive week, data from industry consultancy Mysteel showed on Friday.

Shipments from India, which has imposed a ban on large-scale mining and exports from the world's third-largest iron ore producer, fell around 2 percent from last week, as the higher freight rates and export duties also discouraged exports.
Following is a table showing iron ore port stock movements in the last seven days.
Country of Stockpiles Change (%) origin (mln T) Total 96.30 +1.5
Australia 43.13 +3.8
Brazil 22.82 +0.3
India 10.87 -2.1

Source: Reuters

Macquarie predicts rebound in iron ore prices

Friday, 04 Nov 2011

Iron ore prices have plunged in the last two months from USD 180 per tonne to around USD 118 per tonne. Macquarie Commodities Research puts this down to aggressive destocking by Chinese steel mills and sees upside ahead.

Macquarie predicts easy USD 20 to USD 30 rebound in iron ore prices

Macquarie said that current price levels are not reflective of real demand weakness or substantial oversupply.

Instead, the firm has been watching iron ore inventory at 50 smaller steel mills which during previous price slow downs, from January to March and May to July, fell to 28 days of use. In contrast, inventory at mills’ yards and in port and transit has slumped to just 21 days towards the end of October.

According to Macquarie, the pace of destocking is unsustainable and a Chinese swing from destocking to just moderate restocking could add 80 million tonne per annum to global demand.

Macquarie said that “In turn, the firm expects the first USD 20 to USD 30 per tonne of a recovery should be easy. We therefore expect iron ore to be trading above USD 140 per tonne by the end of 2011.”

(sourced Theajmonline.com.au)

China Coal Prices Face ‘Upward Pressure,’ UOB-Kay Hian Says

Tue,Aug 16, 2011 |By Bloomberg

China’s thermal coal prices face “upward pressure” and may rebound earlier than expected after stockpiles at ports and power stations declined, UOB-Kay Hian Ltd. said.

Demand for domestic coal was reflected in rising freight rates to deliver the fuel from Qinhuangdao port to Shanghai or Guangzhou, Helen Lau, a Hong Kong-based analyst at UOB-Kay Hian, said in an e-mailed note today. Freight costs climbed as much as 3 percent for the week ended Aug. 10 from a week earlier, reversing a downtrend since June, she said.

China’s thermal coal prices typically fall during July through September after power plants complete stockpiling the fuel to meet summer demand. Last year, prices began to rebound in late September as utilities replenished inventories consumed during the peak season, according to data from the Beijing-based China Coal Transport and Distribution Association.

Inventories at the top six Chinese power generation companies have fallen to the equivalent of 15 days of consumption after staying above 17 days since June, Lau said in today’s note. Inventories below 15 days represent supply tightness, she said.

Daily coal consumption at power plants rose to a record in July as electricity demand expanded 12 percent from a year earlier, Cai Hongyu, a Hong Kong-based analyst at China International Capital Corp., the nation’s biggest investment bank, said in a separate e-mailed note today.

China’s thermal coal prices should rebound in September as utilities restock and maintenance begins at Daqin railway, a major coal transportation rail-line, Cai wrote.

China steel production to remain strong in H2, 2011 -CISA

Fri Jul 22, 2011

* China's steel product inventories down for 4th month in row
* Demand to remain strong on high fixed asset spend
* Oversupply, tighter credit and rising energy prices weigh on market

SHANGHAI, July 22 (Reuters) - Steel output in China, the world's top producer, will stay strong in the second half of this year as investment in infrastructure and social housing underpins demand, the country's steel association said on Friday.

"China will continue to maintain high fixed asset investment for the remainder of the year, with water conservation and social housing construction coming on top, which will boost steel demand," the China Iron & Steel Association (CISA) said in its monthly market report.

Despite government credit curbs and falling exports weighing on an already oversupplied sector, China's crude steel production is expected to post increasingly higher year-on-year growth over the remainder of the year.

Data from CISA earlier this week showed that daily output of crude steel from Chinese mills fell 3.1 percent in the first 10 days of July to 1.955 million tonnes, but analysts expect the decline will be limited, with producers of construction steel running close to full capacity.

China's steel firms have been turning out more than 1.9 million tonnes a day since February, from around 1.7 million tonnes last year.

China's steel production may maintain its breakneck pace in the second half of 2011 as a construction boom buoys demand, putting it on track for another record year despite the credit curbs.

Steel output in China amounted to 350.5 million tonnes of crude steel from January to June, up 9.6 percent from a year ago.

"Long steel products will benefit from affordable housing and rural water conservation projects, while flat steel products may face a worsening supply glut," CISA said.

In the 26 major cities monitored by CISA, total inventories of five main steel products -- rebar, wire rod, hot-rolled coil, cold-rolled coil and plate -- fell 290,000 tonnes to 14.32 milion tonnes in June from the previous month, the fourth consecutive monthly fall.

Slower growth in steel-consuming sectors and chronic oversupply problems dragged steel prices down in June, with CISA's long product index falling 0.87 percent and its flat product benchmark dipping 1.59 percent from May.

But high raw material prices will limit the scope for further price cuts, CISA said.(sourced Reuters)

China Coking Coal Supplies In Shortage During 2011

Thu Mar 31, 2011 11:30

China's coking coal output this year would amount to 513 million tons while its consumption would be 569 million tons, resulting in a supply shortage of 56 million tons. China and India have replaced South Korea and Japan as the world's largest importers of coking coal, suggesting the international prices of such a raw material will continue an upward movement in the medium and long run.

China's reserves of coking coal account for only 21.9 percent of its total coal resources. Shanxi harbors 52.4 percent of the country's total coking coal reserves and produces a third of the country's total coking coal. The import volumes of coking coal into China are forecast to increase by 10 percent this year, lower than the staggering growth rate of 37.3 percent in 2010. Soaring oil prices, a weaker dollar and the resources tax reform in Australia will push the international prices of coking coal even higher this year. (sourced:Indiainfoline)

Euro coal June DES ARA trades at USD 128 per tonne

Monday, 28 Mar 2011

Traders and utilities said that prompt European physical coal prices held steady again on Friday, held up more by strong swaps values than physical demand.

Utility sources said that demand for coal in Europe has shrivelled now that German utilities have bought what they need for the near-term and stockpiles in France, Britain and Scandinavia are fairly high.

A European utility source said that "We're still getting offers of almost every type of coal but there's nowhere to put it even if the discount to API2 drops further and we were tempted to buy.”

Prices of close to USD 130.00 a tonne DES ARA do not reflect the abundance of coal supply in Europe but have been hoisted to that level by strong coal swaps prices.

Traders said that swaps have been reacting more to oil volatility and Middle East unrest plus an improvement in the dark spread the profit to be made from generating using coal as fuel, rather than fundamental factors.

One trader said that "Europe is horrible at the moment. Nobody's buying anything, not even the Scandinavians.”

Low water levels on the Rhine and Danube rivers mean barges carrying coal cannot sail fully loaded. This is also dissuading German buyers from taking more prompt coal at present.

In Asia the market seems to be rebalancing quickly after the initial panic about distressed cargoes as a result of the Japanese earthquake and tsunami. (sourced Thomson Reuters)

Iron Ore-Spot prices tick up on slow Chinese buying

Fri Mar 25, 2011 4:25am GMT

* Chinese mills restock on iron ore at slow pace
* Shanghai rebar futures steady
* BHP details $9.5 bln iron ore, coal expansion plan

By Manolo Serapio Jr

SINGAPORE, March 25 (Reuters) - Spot iron ore prices edged up on Friday as some Chinese mills restocked the steelmaking ingredient, but purchases were far from brisk given lacklustre steel prices.

Steelmakers in China, the world's biggest steel market, had slowed iron ore purchases after aggressive stockpiling early this year lifted prices to record highs in mid-February.

Iron ore prices have lost around 13 percent since hitting those peaks last month.

"Chinese mills have kept production at a high level and they've run down on iron ore inventories quite dramatically to the point where they now have to come back to the market and buy," said Graeme Train, commodity analyst at Macquarie Securities in Shanghai.

"The problem is that mills don't want to commit to a large amount of tonnage when steel prices are not performing very well, so it seems like you've hit a bit of stabilisation and it's a bit tricky for prices to fall because mills have to buy."

The most active October contract on the Shanghai Futures Exchange was steady at 4,716 yuan a tonne by the midday break.

The contract is down 0.8 percent on week, having fallen to four-month lows on Tuesday.

Offers for Indian ore with 63.5 percent iron content improved to $171-$173 a tonne, including freight, on Friday, said Chinese consultancy Mysteel, from $170-$172 for most of this week.

The Steel Index's 62 percent iron ore benchmark .IO62-CNI=SI rose 0.5 percent to $166.40 a tonne on Thursday, while other indexes were steady.

Platts 62 percent index IODBZ00-PLT stood at $168.50, unchanged for a fifth straight session, and Metal Bulletin's 62 percent index .IO62-CNO=MB was nearly flat at $164.92.

STEEL DEMAND NOT COLLAPSING

Iron ore prices are likely to stabilise at current levels unless Chinese steel demand picks up strongly, analysts said, while market players assess the impact on steel demand from a reconstruction in disaster-hit Japan.

Japan's steel mills were largely unscathed after the ferocious March 11 earthquake and tsunami and production disruptions would likely mean a total volume loss of 10 million tonnes for 2011, said Colin Liang, analyst at Bank of America Merrill Lynch.

That represents 9 percent of the 109.6 million tonnes of crude steel Japan made last year. Japan is the world's second-largest steel producer after China.

"Iron ore prices should be going up. Steel demand seems fine, it's not exciting but not collapsing either and production is at a reasonably high level," said Macquarie's Train.

"But because credit is a bit of an issue, people are not forward ordering a lot of material, they're not willing to build up their own inventory and that's taken some of the urgency out of purchasing and as a result you're just not seeing any real movement in prices at the moment," he added.

China has been tightening monetary policy and restricting credit to cool growth.

Further gains in iron ore forward swaps <0#sgxios:> suggested some players remain upbeat, with all 24 contracts through February 2013 edging up, and big gains seen for the nearby second-quarter period.

In industry news, BHP Billiton , the world's No. 3 iron ore producer, said it has approved $9.5 billion of capital investment to expand its Australian iron ore and coal mining operations.

"The big risk that hangs over the iron ore market is when you look at 2013, 2014 and all of the supply that's expected to come online following a lot of these capital expenditures," said Ben Westmore, commodity economist at National Australia Bank.

Spot iron ore prices, which gained more than 40 percent in 2010, are likely to remain high until new supply comes in.

Global seaborne supply of iron ore has been increasing by 20 million to 40 million tonnes in recent years, but production expansion plans by global miners could boost annual supply by around 100 million tonnes from late 2012 to early 2013, analysts have said.(sourced Reuters)

Tags : raw material, steel plants,

Iron Ore-Key index slips as Shanghai rebar hits 4-mth low

Tue Mar 22, 2011 3:48am GMT

By Manolo Serapio Jr. and Ruby Lian

SINGAPORE/QINGDAO, March 22 (Reuters) - Chinese steel rebar futures steadied on Tuesday after drifting to four-month lows earlier in the session amid a murky demand outlook that weighed on spot iron ore prices and forward swaps.

China is the world's biggest steel producer and consumer and traders usually look to the direction in Chinese steel prices when deciding whether or not to buy iron ore, the key material in making steel.

The most traded rebar contract for October delivery on the Shanghai Futures Exchange was up a modest 0.3 percent at 4,669 yuan a tonne by the midday break, after falling to as low as 4,627 yuan earlier, its weakest since Nov. 17.

A number of Chinese iron ore traders have remained worried about steel prices and demand in the short term, and are thus reluctant to make forward bookings with suppliers.

Some of them are also facing difficulty securing bank loans to be able to build their raw material stockpiles after a series of moves by China to tighten liquidity, including another increase in cash reserve requirements for banks.

Traders are still trying to assess the impact of Japan's earthquake and tsunami disaster.

"It seems iron ore prices will not be able to pick up significantly right now as mills and traders still see no obvious signals in increasing iron ore buying given weak steel demand," said an iron ore trader in northern China.

The Steel Index's 62 percent iron ore benchmark .IO62-CNI=SI dropped 0.5 percent to $163.80 a tonne, including freight, on Monday, after two days of gains.

The index, based on spot transactions in China, had lost about 15 percent since hitting record highs in mid-February before regaining some ground last Thursday.

Prices of forward swaps <0#sgxios:> also retreated, with second-quarter prices down after recent gains.

Sam Walsh, Rio Tinto's Iron Ore division chief, told an industry conference in Perth that a softening of iron ore prices was due to liquidity tightening in China.(Editing by Ed Lane)

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Iron Ore-Shanghai rebar sags on demand view, China tightening

Mon Mar 21, 2011 2:57am GMT

By Manolo Serapio Jr

SINGAPORE, March 21 (Reuters) - Shanghai steel rebar futures fell more than 1 percent on Monday after China further tightened the amount of funds banks can lend and on demand uncertainty.

The decline in steel prices in China, the world's biggest producer, could stall a nascent recovery in iron ore prices which rose for a second day on Friday after declining for about a month.

"The rise in steel prices last week was pushed by traders, not end-users. We haven't really seen much cargo from our suppliers," said an iron ore trader in China's eastern Shandong province.

"We need to wait and see whether real demand will pick up or not this week. This is quite essential to determine which direction the iron ore market will go."

Adding to demand concerns, China on Friday again raised banks' required reserves, the latest installment in its monetary tightening cycle that many had thought would be put on hold after Japan's devastating earthquake.

"It's getting more and more difficult to get a loan from the bank. This will definitely impact the market," the trader said.

The most briskly traded rebar contract for October delivery on the Shanghai Futures Exchange fell 1.4 percent to 4,691 yuan a tonne by 0241 GMT, dropping for a third day in a row. The contract hit a one-week low of 4,684 yuan earlier.

Key iron ore indexes, based on spot transactions in China, rose on Friday.

Platts' 62 percent iron ore index IODBZ00-PLT jumped $2 to $168.50 a tonne, including freight, and The Steel Index's 62 percent benchmark .IO62-CNI=SI gained 80 cents to $164.70.

Metal Bulletin's 62 percent gauge .IO62-CNO=MB rose 81 cents to $164.30.

The indexes, which global miners use in setting quarterly contract rates, had slid 15 percent since hitting record highs near $200 in mid-February before regaining some ground last week as some Chinese steel mills replenished dwindling stockpiles.

Top iron ore miner Vale said on Friday it will stick with quarterly pricing for sales to steelmakers, even as rival BHP Billiton sells some of its material on a monthly basis and would like its contracts to move even closer to daily spot prices. (Reuters)

Tags :BHP Billiton, spot prices, 63.5% Indian fines,

U.S. flat-rolled steel prices edge $5/st higher on decent demand

Thu,Mar10, 2011 10:22 By Platts

More spot deals came to light Wednesday in the US flat-rolled market, pushing up by $5/st both of the Platts assessments for hot- and cold-rolled coil supplied by domestic mills.

The range of deals assessed by Platts for US-made HRC fell within a wider spectrum of $850-880/st, resulting in a higher midpoint of $865/st ex-works Indiana, with lead times reported at four-to-six weeks by active buyers.

Lead times for cold-rolled coil were two to three weeks longer at most mills, sources said, and the CRC price reached a midpoint of $970/st ex-works Indiana.

"Several mills are starting to look at May," said a major Chicago-based buyer, "and one reason is because ArcelorMittal has very little spot availability for April." He reasoned that ArcelorMittal's contract business has been strong thanks to automotive, leaving fewer tons for the spot market.

Auto sales, inventory and production in the US all look like they will support steel demand, according to Josh Spoores, chief analyst at Ohio-based Steel Reality.

"Production [automotive] has increased and should continue to increase," Spoores notes. One note of caution is for light-weight trucks. He explained that year-to-date truck sales are 29% higher than in 2010 "and the current price surge of gasoline may start to slow truck sales going forward."

Spoores maintained Wednesday that the leading steel indicators continue to show firming demand from manufacturing in general and even construction.

"Construction is now driven by seasonal pressures, though the impact has largely been accounted for," said Spoores. "Without solid gains to come, construction will likely revert to neutral over the next month." He added that manufacturing is generally strong with some leading indicators pointing toward the positive.

He sees supply-side pressures, however, as a negative and believes the inventory cycle is poised to slow.

KEY WILL BE INVENTORY BUILDING...OR NOT: ANALYSTS

"Inventory building has been masquerading as demand," Spoores said. "Prices have increased rapidly, while this source of demand is set to slow. In price cycles of the past, when inventory building slows, prices fall regardless of other demand."

But the analysts at Cleveland Research provided an opposing perspective in a Wednesday report: "Steel inventories remain depleted throughout most steel channels. The distributors are holding minimal inventories [about 8 million st] ... Assuming the consumption environment is getting better, there will be a push for distributors to catch up on the inventory side, compounding the upside to mill volumes in 2H11."

Cleveland Research maintains that domestic steel mills and distributors could see more upside beyond the normal seasonal trading.

"April could represent a new period for higher steel prices, at least until the new supply comes into focus," Cleveland Research said. The analysts' steel industry macro-model assumes 7-8% consumption growth this year, meaning "there may be upside to our 93 million [short] tons demand outlook."

Still, their model uses an average 2011 spot-market price for hot-rolled coil of $730-740/st, which they note "is below the existing transaction values. This is based on an average scrap cost of $425 per ton, which is also below the current price point."

Since January 3, the Platts assessment for US-made hot-rolled coil has averaged $792/st ex-works Indiana -- so future spot deals would have to move much lower if they are to align with the Cleveland Research forecast.

Spoores seems to think the pricing peak is closer.

"Current indicators are calling for a likely price peak and short, but swift decline, before further gains are seen later this year," he said.

Nippon aims to up H-beam price even as stocks up

Thu Mar 10, 2011 6:01am GMT

TOKYO, March 10 (Reuters) - Nippon Steel Corp (5401.T: Quote), the world's No.4 steelmaker, said it aims to secure another price hike on its H-beam steel to pass on surging input costs, even though sluggish sales pushed inventories higher in February.

Domestic inventories of its H-beam steel used in construction rose 8.9 percent to 174,600 tonnes at the end of February from the month before, a company official said.

"Shipments were slow in February due in part to the market's seasonal weakness, but with demand from small office and other building projects increasing, we plan to implement another price hike as soon as possible," he said.

Nippon Steel boosted the price of H-beams in February to above 80,000 yen per tonne for a third consecutive price increase, sources told Reuters.

Rival Tokyo Steel Manufacturing Co (5423.T: Quote) said last month it would raise prices of all its products in March to cover rising input costs. (Reporting by Yuko Inoue, sourced :Thomson Reuters)

Tata Steel Europe raises UK structurals prices $151/mt again for March

Friday, 28Jan, 2011

London: Tata Steel Europe said Friday it will raise the sale prices on structural sections in the UK by GBP95/mt ($151/mt), citing higher coking coal and raw material costs affecting the business.
Effective on all deliveries from March 6, the increase follows a GBP50/mt price increase the company announced late last year for the period starting January 2.
"The recent extreme flooding in Queensland has led to spot prices in coal and other raw materials markets, which were already suffering from chronic structural supply side constraints, to rise beyond anticipated levels," Mick Maloney, Tata Steel commercial manager for sections, said in a statement. "The steel supply chain has no choice but to take robust action to recover these rapid increases in raw materials costs."

Tata Steel said in December that lower inventories led it to make its prior price increase as it took action before an expected upswing in demand in the usually more active construction season starting at the end the first quarter. (sourced:Platts)

Steel prices may continue to go up in China - MOFCOM

Friday, 28 Jan 2011
According to survey, domestic steel prices presented three-week continuous increase with rising market transactions. By last week, domestic steel prices were up by 1%WoW including 3mm HR sheet coils, 14 I-beam and 20 1.2 welded steel pipe up by 2%, 1.8% and 1.7% respectively.

Traders and construction enterprises increased their winter-stocking, as per statistics, the social inventory of construction steel eyed a WoW increase of 6.9% by January 21 up by 23.1% from last month.
As predicted, the steel prices would be further edging up by small amounts in the later periods mainly boosted by many mills pulled up their ex-works prices.
(Sourced from MySteel.net) visit www.Mysteel.net for real time access to China steel news!

Steel futures at SHFE post record gains in pre holiday period

Wednesday, 26 Jan 2011
Bloomberg reported that steel futures in Shanghai jumped to a record with buyers in China stockpiling the raw material in anticipation of a shortfall in supplies.
Rebars futures, on the Shanghai Futures Exchange, for October delivery gained for a third day rising as much as by 2.6% to CNY 5,093 per tonne, the highest ever. The contract was at CNY 5,077 per tonne at the 11:30 AM break, up by 5.5% this month.
The May delivery wire rod contract rose by 2.7% to CNY 4,909 per tonne.
Rebar inventories monitored by the Shanghai Futures Exchange fell to 17,259 tonnes last week, the lowest since August 2009.

Mr Huang Huiwen analyst with China International Futures (Shanghai) Co said “Raw material prices continue to support steel prices. Iron ore supplies may further tighten as Chinese steel demand and production picks up.”
He said “The strength in raw material prices should ensure the continued upward momentum of steel prices.”
But Mr Huang cautioned that “The biggest risk to the market lies in China’s moves to rein in liquidity and property speculation.”

China’s central bank on Jan. 14 ordered lenders to hold more deposits as reserves for the fourth time in two months, adding to last year’s policy tightening measures by the government that included two interest-rate increases. Other steps since April include curbing loans for third-home purchases, increasing down-payment requirements and raising mortgage rates.
China boosted steel output by 9.3% to a record in 2010 to reach about 627 million tonnes and as per some analysts would rise to 661 million tonnes in 2011. (sourced:Bloomberg)

Tokyo Steel to hike H Beam prices

Monday, 24 Jan 2011
Tokyo Steel announced that it will raise prices of its all products in February to cover rising input costs.
Tokyo Steel said it will raise H beam steel prices by JPY 3,000 per tonne (USD 36) to JPY 28,000 per tonne in February.
Nippon Steel Corp has recently notified its distributors of a price rise of JPY 10,000 per tonne for H beams, citing higher raw materials costs and a decline of inventories to a record low level.
(Sourced from Reuters)