Shagang puts up rebar and wire rod prices
Eastern China's Shagang announced on 21 June that it will increase rebar and wire rod prices by RMB 130/tone ($19/t) and RMB 180/t respectively for deliveries towards the end of June. The adjustments have taken new prices for 16-25mm HRB335 rebar and 6.5mm carbon wire rod to RMB 3,750/t ($549/t) and RMB 3,880/t. The large increase from Shagang and other producers at almost the same time have given impetus to further rises in the Hangzhou market. On 22 June, prices for Shagang-sourced 16-25mm HRB335 picked up by RMB 80/t to RMB 3,800-3,820/t, with 17% VAT. A Hangzhou trader says he does not understand why mills have chosen to substantially raise their prices at this moment because he sees demand falling as construction slows in the peak of summer. "Many traders have shut up for the afternoon until they can see what's really going on in the market," he says. Shanghai traders are offering 18-25mm HRB335 at about RMB 3,680-3,720/t, up by RMB 120-150/t in a day. Meanwhile, 16-22mm HRB335 rebar prices have soared by RMB 100-110/t to RMB 3,730-3,750/t. A Shanghai trader is also circumspect about rising prices. "The current prices are relatively high, which increases the risk of placing new orders," he tells Steel Business Briefing. SBB notes that rebar futures prices on the Shanghai Futures Exchange are in line with physical market trends, with September contract prices closing at RMB 3,919/t on Monday, up by RMB 12/t from the previous trading day last Friday.
Iron ore benchmark clock ticking for China
China has one week in which to decide whether to accept similar iron ore benchmark terms to those agreed between Rio Tinto and Japanese/Korean mills before existing long-term contracts potentially become null and void. Rio chief executive for iron ore, Sam Walsh, pointed out last month that the 30 June deadline was the trigger for the two sides eventually settling 2008-09 contracts. Steel Business Briefing understands that Rio is unlikely to change its position of offering the same terms . a 33% reduction in the price of contract fines and a 44.5% drop for lump . and that the decision rests firmly with Baosteel/China Iron & Steel Association (CISA). CISA has so far resisted accepting similar pricing and continues to call for a reduction of at least 40%. D.J. Carmichael analyst James Wilson said Rio will not change its position as the company won't risk upsetting its Japanese and Korean clients. "Rio wouldn't agree to lower prices as Nippon Steel and Posco would undoubtedly say they wanted their prices backdated and then the whole thing starts again," he tells SBB. Metalytics analyst Dallas Horadam said it was unsurprising that CISA and Chinese mills would "resist and reject for a suitable period." He adds: "We have never thought it likely that the Chinese mills would get a different settlement." Citigroup analyst Alan Heap told SBB that contract terms are settled on a company-to-company rather than country-to-country basis, such as the deal agreed between ArcelorMittal and Vale last week. "It's hard to countenance that smaller Chinese producers will achieve a larger price decline," he said.
Eastern China's Shagang announced on 21 June that it will increase rebar and wire rod prices by RMB 130/tone ($19/t) and RMB 180/t respectively for deliveries towards the end of June. The adjustments have taken new prices for 16-25mm HRB335 rebar and 6.5mm carbon wire rod to RMB 3,750/t ($549/t) and RMB 3,880/t. The large increase from Shagang and other producers at almost the same time have given impetus to further rises in the Hangzhou market. On 22 June, prices for Shagang-sourced 16-25mm HRB335 picked up by RMB 80/t to RMB 3,800-3,820/t, with 17% VAT. A Hangzhou trader says he does not understand why mills have chosen to substantially raise their prices at this moment because he sees demand falling as construction slows in the peak of summer. "Many traders have shut up for the afternoon until they can see what's really going on in the market," he says. Shanghai traders are offering 18-25mm HRB335 at about RMB 3,680-3,720/t, up by RMB 120-150/t in a day. Meanwhile, 16-22mm HRB335 rebar prices have soared by RMB 100-110/t to RMB 3,730-3,750/t. A Shanghai trader is also circumspect about rising prices. "The current prices are relatively high, which increases the risk of placing new orders," he tells Steel Business Briefing. SBB notes that rebar futures prices on the Shanghai Futures Exchange are in line with physical market trends, with September contract prices closing at RMB 3,919/t on Monday, up by RMB 12/t from the previous trading day last Friday.
Iron ore benchmark clock ticking for China
China has one week in which to decide whether to accept similar iron ore benchmark terms to those agreed between Rio Tinto and Japanese/Korean mills before existing long-term contracts potentially become null and void. Rio chief executive for iron ore, Sam Walsh, pointed out last month that the 30 June deadline was the trigger for the two sides eventually settling 2008-09 contracts. Steel Business Briefing understands that Rio is unlikely to change its position of offering the same terms . a 33% reduction in the price of contract fines and a 44.5% drop for lump . and that the decision rests firmly with Baosteel/China Iron & Steel Association (CISA). CISA has so far resisted accepting similar pricing and continues to call for a reduction of at least 40%. D.J. Carmichael analyst James Wilson said Rio will not change its position as the company won't risk upsetting its Japanese and Korean clients. "Rio wouldn't agree to lower prices as Nippon Steel and Posco would undoubtedly say they wanted their prices backdated and then the whole thing starts again," he tells SBB. Metalytics analyst Dallas Horadam said it was unsurprising that CISA and Chinese mills would "resist and reject for a suitable period." He adds: "We have never thought it likely that the Chinese mills would get a different settlement." Citigroup analyst Alan Heap told SBB that contract terms are settled on a company-to-company rather than country-to-country basis, such as the deal agreed between ArcelorMittal and Vale last week. "It's hard to countenance that smaller Chinese producers will achieve a larger price decline," he said.
Malaysian Ringgit Exchange Rate