Expectations are running high for ferrochrome sellers and they have been successful in pushing prices higher, albeit, for smaller tonnages. In the US, high-carbon ferrochrome was consistently sold for over $1.30 per lb, with some higher, low-purity grades breaching the $1.40 level. A major US stainless mill appears to be running flat out and can’t find enough scrap or fines and has started to buy lumpy—not itsusual practice.
Even in Europe, high-carbon prices moved closer to the$1.30 level and up to $1.34, ddp. High-carbon fines were booked at $1.09. “I expected prices to firm, but not thisquickly,” one buyer said. “All I hope is that I can pass themalong.”
Charge chrome prices started to move though a major South African producer sold around 13,000 mt to China at $1.06-1.09, ex warehouse. European charge chrome buyers were paying over $1.10 in warehouse and two large stainlessmills were out for material for second-quarter delivery.
US chromium metal and 0.10% C low-carbon prices werehigher in the US.
The incumbent supplier is fighting to keep its long-term contract with a major US mill. The seller reportedly not only offered to increase its discount to double-digit levels fromsingle digits, but is reportedly offering to make the new contract retroactive to 2011 instead of 2012. The mill, which usually buys about 100,000 mtpy of ferrochrome, is reportedly obligated to make more than 50% under a take-or-pay agreement but can buy the remainder on the spot market ifprices are more competitive. The mill is now thought to belooking for a five-year rather than a three-year agreement.
IFM reportedly is having more furnace problems and may have to take down one of its two furnaces for a prolonged shutdown before its planned June date. Shareholders fear thecompany might have to seek further financing, with JICSO, the largest shareholder, the likely candidate.
Chinese major stainless mills last week increased their tender prices for March purchases of high-carbon ferrochrome. Baosteel set its tender price at 9,500 yuan per mt, ddp, ($1.11per lb VAT unpaid) up 600 yuan, or 6.7% compared withFebruary. Meanwhile, TISCO has increased its tender priceto 9,400 yuan ($1.10), up 500 yuan or 5.6% from February.
Prices for high-grade chrome ore in China were higher lastweek, but Chinese smelters are taking less lower qualitymaterial and that is putting pricing pressure on those grades. The smelters blend the high grade ore with lesser grades.
The possible site that Cliffs has picked in Sudbury, Ont., isconsidered a brownfield location that could spare it some environmental problems. It seems that the various municipalitiesin Ontario are lining up to get the proposed smelter, especially since it will create high paying jobs. Officials in Ontario areafraid that the smelter could be built in Quebec because of lower power prices, while other Canadian provinces are alsovying for the plant. “It has a great deal more public and government support than I thought,” one analyst said. “It onlyshows how important mining and smelting are to the Canadians. Unlike the US, they want the smelter and mine.”
Xstrata continued its policy of not disclosing its ferrochrome sales even though it releases sales for all its other commodities. Xstrata also continued to combine ferrochrome with vanadium in its Alloys division for financial reporting. During 2010, Xstrata’s ferroalloys division reported an operating profit of $313-million, primarily dueto an average 46% increase in the average ferrochrome sales price.
Bulk earthworks will start on the second, 360,000-mtpyexpansion phase at Xstrata’s Lion smelter complex this quarter and commissioning is planned for the first half of 2013. An agreement was concluded with Lonmin to increase andextend the current UG2 offtake agreement from tailings atLonmin’s Marikana operations. The tailings will be treatedthrough chromite recovery plants that will be built, ownedand operated by the Xstrata-Merafe chrome venture. TotalUG2 supply sourced through this deal agreement will amount to approximately 1.5-million mtpy.
The new 600,000-mtpy pelletizing and sintering plant atRustenburg, Project Tswelopele, is expected to be fully operational in 2013. The plant will agglomerate some of the additional UG2 from the Lonmin operations.
The Horizon mine development remains on schedule toreach a production capacity of 40,000 mtpm by the end of 2013. Production at Waterval mine will start at the end of the first quarter of 2011, producing an average of 30,000 mtpmfrom available mineable panels.
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Saturday, February 12, 2011
Russia’s pig iron exports fell 6.2% in 2010
Russia’s pig iron exports fell 6.2% in 2010 to 4,210,366 mt compared to 4,490,936 mt in 2009. Shipments to Italy, Turkey, Spain, and Korea rose in 2010 compared to the prior year, but exports to the US fell 60.3% to 493,573mt compared to 1,244,696 mt and exports to China weredown 64.3% to 146,827 mt compared to 411,477 mt in2009. Exports to Italy rose 16.7% to 1,580,309 mt compared to 1,247,043 mt, and exports to Turkey increasedby 44.7% to 542,030 mt compared to 374,547 mt.
Pig iron stalls, scrap slides
There is not sufficient buying activity in the pig iron market to determine whether prices are going up or down, traders agree. Scrap prices, however, have retreated, and pig iron suppliers suggest that pig iron might not be affected by the downward drift because supply continues to be snug.
Brazilian pig iron producers have not lowered their offerprices from $550 per mt, c.i.f. New Orleans but many of them have stepped away from the market. “The producers know scrap prices are down, and they don’t want to be forced into a discussion about reducing pig iron prices,” said a trader.
Most northern Brazilian producers don’t have any material available until April shipment. As a result, they are not under any pressure to make sales currently. It is possible that some small sales of Russian pig iron have been made in Europe at $550 per mt, f.o.b. Black Sea, but European traders note that buyer resistance is particularly strong evenat $480 per mt, today.
US scrap prices fell $20-30 per lt in most parts of the country. In Chicago, which was hit with a massive snowstorm, scrap prices were only $15 less than in January. Turkey has not been buying much US scrap, which has meant more materialis available domestically. Last week, traders said a scrap sale was done in Turkey at $450 per mt.
Some metallics suppliers are banking on scrap prices recovering in March. They say the order books of mills are strong into the second quarter, and some more blast furnaces are being turned on in North America to meet anticipated demand. Essar Steel Algoma, for example, said it had restarted its No. 7blast furnace last week and expected it to return to normaloperating levels in a few days. ArcelorMittal said that its average
operating rate in 2011 would be 76% compared to 69%.
“It’s not much of an increase,” said an analyst, “but it is whenthere is no raw material inventory on the ground.”
The HBI market has gone even quieter now that the exportmarket for scrap has stalled. Traders report that prices out of Venezuela are $390 per mt, f.o.b.. However, almost no HBI isbeing shipped from Venezuela. North American consumers would have to pay roughly $430-440 per mt, c.i.f. New Orleans, but with scrap readily available, few consumers arelooking at HBI. A sale of Libyan HBI reportedly was done in Spain at $470 per mt, although traders felt the price was inflated.
Brazilian pig iron producers have not lowered their offerprices from $550 per mt, c.i.f. New Orleans but many of them have stepped away from the market. “The producers know scrap prices are down, and they don’t want to be forced into a discussion about reducing pig iron prices,” said a trader.
Most northern Brazilian producers don’t have any material available until April shipment. As a result, they are not under any pressure to make sales currently. It is possible that some small sales of Russian pig iron have been made in Europe at $550 per mt, f.o.b. Black Sea, but European traders note that buyer resistance is particularly strong evenat $480 per mt, today.
US scrap prices fell $20-30 per lt in most parts of the country. In Chicago, which was hit with a massive snowstorm, scrap prices were only $15 less than in January. Turkey has not been buying much US scrap, which has meant more materialis available domestically. Last week, traders said a scrap sale was done in Turkey at $450 per mt.
Some metallics suppliers are banking on scrap prices recovering in March. They say the order books of mills are strong into the second quarter, and some more blast furnaces are being turned on in North America to meet anticipated demand. Essar Steel Algoma, for example, said it had restarted its No. 7blast furnace last week and expected it to return to normaloperating levels in a few days. ArcelorMittal said that its average
operating rate in 2011 would be 76% compared to 69%.
“It’s not much of an increase,” said an analyst, “but it is whenthere is no raw material inventory on the ground.”
The HBI market has gone even quieter now that the exportmarket for scrap has stalled. Traders report that prices out of Venezuela are $390 per mt, f.o.b.. However, almost no HBI isbeing shipped from Venezuela. North American consumers would have to pay roughly $430-440 per mt, c.i.f. New Orleans, but with scrap readily available, few consumers arelooking at HBI. A sale of Libyan HBI reportedly was done in Spain at $470 per mt, although traders felt the price was inflated.
Pig Iron prices loses substantial ground at Black Sea
Pig Iron prices have lost substantially being quoted around USD 530 per tonne CFR FO from a previous USD 530 per tonne FOB Black Sea.
Friday, February 11, 2011
US steel mills keep steel wire prices for Mar. unchanged
Even the scrap prices have dropped recently, the US steel mills include Gerdau AmeriSteel and Keystone still announced to remain the steel wire prices unchanged.
Accordingly, it’s predicted that the other steel mills would follow the two companies to remain the prices flat as well.
Also, Nucor, the largest manufacturer of steel long products in the US has decided to remain its prices unchanged for March.
News Date 2/11/2011 3:29:27 PM reported by Laura
Accordingly, it’s predicted that the other steel mills would follow the two companies to remain the prices flat as well.
Also, Nucor, the largest manufacturer of steel long products in the US has decided to remain its prices unchanged for March.
News Date 2/11/2011 3:29:27 PM reported by Laura
Shanghai rebar, iron ore prices at record, By: Reuters
SINGAPORE – Shanghai steel futures rose to a record for a fifth day in a row on Friday as index-based spot iron-ore prices bolted to all-time highs on tight supplies and strong demand from top buyer China.
Chinese steelmakers are boosting production in anticipation of a seasonal pickup in demand over the next two months.
The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange was up 0,5% at 5 216 yuan a ton by 0201 GMT, after touching a peak of 5 226 yuan earlier.
The surge in rebar futures followed record levels reached by iron ore price indexes on Thursday.
Global miners Vale , Rio Tinto and BHP Billiton use the indexes in setting quarterly iron ore contracts, which analysts forecast may hit a record $165/t for 62% Australian fines, free on board, in the second quarter, according to a recent Reuters poll.
BHP, Rio Tinto, Vale as well as Australian iron ore producer Fortescue Metals Group "are shipping as much as they can" while shipments from No. 3 supplier India are crimped by an export ban in Karnataka and transport restrictions in Orissa, Commonwealth Bank of Australia said in a note.
India's Supreme Court is likely to rule on the Karnataka ban this month, which if lifted, could dampen the rally that has pushed up price indexes by 11% so far this year, after gaining more than 40% in 2010.
The Karnataka ban has been in place since last July, shrinking India's iron-ore exports for a sixth straight month in December.
Platts' 62% iron ore index rose $1,50 to $190,25/t, cost and freight delivered to China, on Thursday.
The Steel Index 62% iron-ore benchmark climbed $1,60 to $188 and Metal Bulletin's 62% gauge jumped $1,79 to $185,90.
Steel firms may up prices several times next fiscal
Steel companies are likely to dance to the tunes of high raw material prices and opt for several rounds of upward price revisions next fiscal.
Experts say while the watermarks of Australian floods will refuse to dry on coking coal prices, even iron ore prices will stay firm due to Chinese demand.
“If we talk about the calendar year 2010, steel had underperformed other commodities, many of which scaled an all-time high. So, it is going to be the year of steel,” said Ramesh Iyer, vice president - product development, National Commodity and Derivatives Exchange Ltd (NCDEX).
In June 2008, steel prices touched a high of Rs38,000 per metric tonne and subsequently went to a low of Rs17,500 per tonne. On an average, the prices stayed at Rs24,000 for the entire period of the calendar year.
“I will not be surprised if prices peak to Rs32,000,” he said and added that the average for the calendar year 2011 is expected to be Rs29,000.
Therefore, in a bid to protect their margins, the companies may increase steel prices in steps, throughout the year, to offset the impact.
Coking coal and iron ore are the two main raw materials required in steel manufacturing. Coking coal, after being converted into coke, is poured into a blast furnace, along with iron ore, where it is burnt to produce heat, which melts the iron ore and refines it off its impurities. To produce one tonne of steel, almost 1.6 tonnes of coking coal and 1.8 tonnes of iron ore is required.
Due to the impact of high prices of both the raw materials, companies are expected to be under pressure to either pass on the cost or take a hit on their margins.
Due to the impact of high prices of both the raw materials, companies are expected to be under pressure to either pass on the cost or take a hit on their margins.
“Both iron ore and coking coal/coke prices have increased significantly in the second half of CY2010. Coking coal prices being particularly impacted by supply-related concerns following the Australian floods,” said Jayanta Roy, senior vice president, corporate sector ratings, ICRA Ltd.
He said in future backward-integrated steel players such as Tata Steel and JSPL are likely to enjoy better profits and cash flows in the near term, since they have captive iron ore and coal mines.
SAIL also would benefit partially, having captive iron ore sources.
But for non-integrated players, the extent of margin expansion would be capped by the price at which they would be able to source raw materials from the market.
But for non-integrated players, the extent of margin expansion would be capped by the price at which they would be able to source raw materials from the market.
The high prices will be complimented by a reviving market in the Western world in the next fiscal, which in turn will enhance the demand for steel.
According to World Steel Association, world crude steel production reached 1,414 million metric tons (mmt) for the year of 2010. An increase of 15% compared with 2009 and is a new record for global crude steel production. This is expected to even exceed in this year, say analysts.
Vibhu Ratandhara, assistant vice president, Bonanza Commodities, said, “The UK crisis is almost over and the US data is also fantastic. Therefore, 2011 is expected to be a year of firm steel prices, backed by a firm demand.”
Therefore, in the light of high prices, if companies do not pass on the costs, they have to utilise their assets more efficiently.
Therefore, in the light of high prices, if companies do not pass on the costs, they have to utilise their assets more efficiently.
Analyst Abhijit Mitra from brokerage firm ICICI Securities, in a January 14 report on the steel industry, said, “With unexpected raw material inflation, steel majors will face renewed pressure on working capital cash outflows. Hence, to improve or even maintain return on equity, and to meet interest outflow obligation, focus will be again on asset utilisation, which will strain prices. Thus, steelmakers will face great difficulty in passing on raw material prices.”
“And this will have a ripple effect on almost all sectors, right from automotive, construction to consumer durables,” said Rahul Sonthalia, vice president, portfolio management services, MPA Financial Services Limited.
So, there is no respite for the common man, from an already burdened pocket with double-digit inflation.
Iron ore upswing may not last as China mulls raise in output
KOLKATA: Iron ore prices , which have been steadily climbing to touch $200 per tonne, may cool off in the long run as China is all set to increase iron ore production. The Dragon has just identified 4-5 billion tonne iron ore mines near Mongolia and this may impact their buying pattern in the global market.
Basant Poddar, MD of Mineral Enterprises, said: “The current upswing may not continue for long as China is trying to bring new mines into production. Since China is the largest producer of steel and is a large buyer of iron ore from the global market, the new development is expected to influence their purchases. Since they buy a substantial quantity of iron ore from India, a drop in their offtake could have a bearish effect on Indian exports.”
A similar view was expressed by RK Sharma, secretary general of Federation of Indian Mineral Industries, who added that China will continue to play a big role in influencing global raw material prices. “Globally, there is a supply crunch of iron ore. This is expected to drive prices up further in the coming days. The Chinese have, so far, not been active in the global market due to the New Year-related activities,” Sharma said. In the next few months, the outlook on prices is expected to remain bullish as the global steel industry is led by the revival in demand from the Chinese steel makers.
H Noor Ahmed, partner of Trident Minerals, said that the current upward price movement is a “momentary phenomenon” and is largely expected to be led by China. “However, we are now disturbed with the closure of iron ore mines in Karnataka which is affecting domestic supplies,” he added.
The trading community expects prices to remain firm in the next few months. “We are noticing a general uptrend in steel input prices due to the recovery in Europe and the US. China, the world’s largest steel producer, too is expected to continue its growth. This is likly to firm up prices in next few months. For Indian steel companies that rely on the market to get ore, this imply a hike in production costs,” said an official of the Indian arm of a leading global trading firm
Basant Poddar, MD of Mineral Enterprises, said: “The current upswing may not continue for long as China is trying to bring new mines into production. Since China is the largest producer of steel and is a large buyer of iron ore from the global market, the new development is expected to influence their purchases. Since they buy a substantial quantity of iron ore from India, a drop in their offtake could have a bearish effect on Indian exports.”
A similar view was expressed by RK Sharma, secretary general of Federation of Indian Mineral Industries, who added that China will continue to play a big role in influencing global raw material prices. “Globally, there is a supply crunch of iron ore. This is expected to drive prices up further in the coming days. The Chinese have, so far, not been active in the global market due to the New Year-related activities,” Sharma said. In the next few months, the outlook on prices is expected to remain bullish as the global steel industry is led by the revival in demand from the Chinese steel makers.
H Noor Ahmed, partner of Trident Minerals, said that the current upward price movement is a “momentary phenomenon” and is largely expected to be led by China. “However, we are now disturbed with the closure of iron ore mines in Karnataka which is affecting domestic supplies,” he added.
The trading community expects prices to remain firm in the next few months. “We are noticing a general uptrend in steel input prices due to the recovery in Europe and the US. China, the world’s largest steel producer, too is expected to continue its growth. This is likly to firm up prices in next few months. For Indian steel companies that rely on the market to get ore, this imply a hike in production costs,” said an official of the Indian arm of a leading global trading firm
Thursday, February 10, 2011
PREVIEW - Supreme Court ruling key to iron ore price rally
(Reuters) - The Supreme Court may decide as early as next week whether to lift a 6-1/2-month ban on iron ore exports from Karnataka, a ruling that could dampen a surge in spot prices since the start of the year.
Tight global supply of the raw material used to make steel has fueled a surge in spot prices to near record highs, a boon for miners and burden for steelmakers grappling with rising cost of iron ore that last year increased more than 40 percent.
Karnataka is the second biggest iron ore producer in India, the world's No. 3 supplier. The state, in a crackdown on illegal mining, has banned shipments since July 26 last year.
Around a quarter of India's annual exports of around 100 million tonnes comes from Karnataka and because of the ban India's iron ore exports fell for a sixth straight month in December.
India's top court is expected to make a decision on the ban in mid-February.
"The lifting of the ban will definitely lift exports and at some point will at least slow the rally that we have seen," said Christopher Ellis, index analyst at data provider Metal Bulletin.
A surge in key price indexes, based on spot prices and which global miners like Vale and Rio Tinto use in setting quarterly contracts, to record levels recently will lift contract prices to a record $165 per tonne in the second quarter, according to a Reuters poll of analysts.
But a recovery in world seaborne supply later in the year is expected to cut contract prices for the second half.
"However you look at it, the tightest market is probably behind us and you're going to definitely see an improvement in volume out of Brazil, Australia, and potentially out of India," said Macquarie commodity analyst Graeme Train.
"And that will put a little bit of pressure on spot prices."
Analysts predict global iron ore seaborne supply to increase by around 20 million tonnes this year, with the additional volume to come through from the second quarter.
TEDIOUS RULES
But even with more material out of Karnataka or India in general, may be looking at ways to reduce exports to meet domestic demand likely to grow bigger in the future with steel giants ArcelorMittal and POSCO looking to build plants in the country.
India last month cleared plans by POSCO, the world's No. 3 steelmaker, to build a $12 billion steel mill, the country's biggest foreign direct investment.
Indian Railways last month raised iron ore freight cost by 50 percent to take advantage of higher spot prices and there has been talk of India considering to increase iron ore export duty to 20 percent from 5-10 percent currently.
The top iron ore producing state Orissa, where the POSCO mill will be built, is also looking at implementing an export ban.
"I think we will see a slightly restrictive supply response out of India this year," said Mark Pervan, senior commodity analyst at Australia and New Zealand Bank.
A court ruling on Karnataka could influence the situation in Orissa which may have a weaker case to ban exports if Karnataka resumes shipments overseas.
Exporters in Karnataka are hoping to resume overseas sales in March although the state may start requiring a lot more paperwork as it weeds out illegal miners.
"The documentation process will be tedious and it will take time for people to get accustomed to it," said Dhruv Goel, managing partner at iron ore trader Steelmint in Orissa.
"It is in the interest of the major miners in the state to cooperate and make sure a similar situation does not recur - they have lost out massively, especially with prices hitting record highs," said Metal Bulletin's Ellis
Iron ore spot prices remain at high level
| The spot prices of iron ore have still remained at high level after Chinese Lunar Year vacation. The current spot prices of Indian iron ore fines contains 63.5% of Fe are at US$190~US$192/ton C&F. Moreover, dealers predicted that the prices would have chance to soar to US$200/ton C&F in the middle of this February. |
Chinese iron ore traders switch to coking coals amid soaring iron ore prices
It is reported that many iron ore traders find it hard to do business, as iron ore spot prices continue to boost against sluggish transactions meanwhile, Indian sellers put off deliveries frequently. In face of the soaring iron ore prices and few resources at ports, intermediate traders almost gain no profits. Some iron ore traders even shift to coking coal businesses and put iron ore trades aside.
Sources show that iron ore prices continue to hit new highs in 2011. Analysts predict that iron ore prices in China spot market might exceed USD 200 per tonne in near term. Currently, Indian iron ore prices have already gone beyond USD 190 per tonne.
Steel analysts point out that “A series of policies and measures made by some countries such as India, which put barriers to China iron ore imports, are the very reason for iron ore price hikes, indicating that spot iron ore prices might continue to go up after Chinese Lunar New Year holidays.”
A Chinese iron ore trader whose company imports iron ores from India, Ukraine, Australia, Russia and other countries said “Several shipments of iron ores we ordered from Indian traders have been put off deliveries for half a month. The company is currently concerned about whether Indian iron ore traders will carry out the contract, let alone profit negotiations. Iron ore imports from India have accounted for around 50% of the company total imports. The delay of deliveries by Indian side is a heavy batter to us.”
In addition, quality of iron ore shipments could not be guaranteed. The above mentioned iron ore trader said “For example, it is normal to receive 62.5% Fe grade iron ore shipments, when it is supposed to be 63.5% as formerly settled in contracts.”
In this case, some iron ore traders shift to sell coking coals. As an important raw material of iron and steel industry, coking coal takes up 30% of total raw material costs. Impacted by floods in Australia, global coking coal price skyrocketed in mid-January. According to analysts, Australian coking coal exports account for two thirds of global trade and coking coal export volumes from flood areas in Australia take up around 90% of the country total share. Although Australia reiterated that the floods have little impact on the supply, bullish anticipations on coking coal price are still much enhanced in the market.
According to source from a steel mill, international coking coal prices have currently leaped to more than USD 300 per tonne compared with USD 200 per tonne in December 2010. From the aspect of demand in China, coking coal demand would increase greatly in March a peak period for steel production. Therefore, domestic coking coal prices will have large scope to go up in the next few months. It is reasonable for iron ore traders to switch to coking coal businesses in such difficult situations.
(Sourced from MySteel.net)
Sources show that iron ore prices continue to hit new highs in 2011. Analysts predict that iron ore prices in China spot market might exceed USD 200 per tonne in near term. Currently, Indian iron ore prices have already gone beyond USD 190 per tonne.
Steel analysts point out that “A series of policies and measures made by some countries such as India, which put barriers to China iron ore imports, are the very reason for iron ore price hikes, indicating that spot iron ore prices might continue to go up after Chinese Lunar New Year holidays.”
A Chinese iron ore trader whose company imports iron ores from India, Ukraine, Australia, Russia and other countries said “Several shipments of iron ores we ordered from Indian traders have been put off deliveries for half a month. The company is currently concerned about whether Indian iron ore traders will carry out the contract, let alone profit negotiations. Iron ore imports from India have accounted for around 50% of the company total imports. The delay of deliveries by Indian side is a heavy batter to us.”
In addition, quality of iron ore shipments could not be guaranteed. The above mentioned iron ore trader said “For example, it is normal to receive 62.5% Fe grade iron ore shipments, when it is supposed to be 63.5% as formerly settled in contracts.”
In this case, some iron ore traders shift to sell coking coals. As an important raw material of iron and steel industry, coking coal takes up 30% of total raw material costs. Impacted by floods in Australia, global coking coal price skyrocketed in mid-January. According to analysts, Australian coking coal exports account for two thirds of global trade and coking coal export volumes from flood areas in Australia take up around 90% of the country total share. Although Australia reiterated that the floods have little impact on the supply, bullish anticipations on coking coal price are still much enhanced in the market.
According to source from a steel mill, international coking coal prices have currently leaped to more than USD 300 per tonne compared with USD 200 per tonne in December 2010. From the aspect of demand in China, coking coal demand would increase greatly in March a peak period for steel production. Therefore, domestic coking coal prices will have large scope to go up in the next few months. It is reasonable for iron ore traders to switch to coking coal businesses in such difficult situations.
(Sourced from MySteel.net)
Freight charges are the focus for steelmakers
The focus of iron ore negotiations between Chinese steelmakers and global iron ore producers this year will shift to freight price stabilization, to keep steelmakers' costs low, the Economic Observer Newspaper reported.
China's steel mills and its steel lobby body, the China Iron and Steel Association (CISA), have accepted the mechanism of quarterly iron ore pricing, the report said. In January, the Australian miner BHP Billiton Ltd moved to a monthly set-pricing system after three mining companies abandoned a 40-year tradition of annual iron ore negotiations in March 2010 and turned to a quarterly pricing mechanism linked to iron ore indexes.
The CISA has previously insisted that Chinese steel mills should have long-term iron ore prices, which could stabilize their raw material costs.
The report said this year's negotiations are no longer about whether to accept quarterly pricing, but have shifted to freight costs. Shipping costs from Australia to China can vary widely, from $6 to $50 per ton.
The big three miners, BHP, Vale SA, and Rio Tinto Group currently offer FOB (free on board) prices to Chinese steelmakers, while the world's major three iron ore indexes calculate CFR (cost, freight) prices, using a formula based on the average spot market price over the previous quarter.
According to historical records, ocean freight costs will fall before the annual negotiations, but once they are completed, the price is likely to rise dramatically.
The recent rally in spot iron ore prices is likely to push up second-quarter contract rates to a record $165 a ton for ore FOB from Australian mines with an iron content of 62 percent, a Reuters poll reported.
Platts' 62 percent iron ore remains at $187.3 a ton, including freight, delivered to China, a record reached last week.
The Steel Index (TSI) 62 percent iron ore benchmark was also steady at $185.6 and Metal Bulletin's 62 percent ore was unchanged at $183.4.
The CISA is in discussion with Australian miners about the stabilization of freight charges to reduce volatility and keep costs stable, said an executive with a State-owned steelmaker, who declined to be named as the issue is sensitive.
The Brazilian company, Vale, in 2009 signed independent ore contracts with Chinese steel mills for fixed freight charges to further expand its presence in the country.
Some Chinese steelmakers have signed pricing contracts valid for three to four years with Vale for fixed freight, according to earlier reports.
Unlike BHP and Rio, which ship ore from Australia, Vale needs to transport iron ore from Brazil to China, resulting in much higher freight costs.
Vale is building 16 large ore carriers to reduce transportation costs between China and Brazil.
Freight costs from Brazil to China can vary from $10 to $110 per ton, based on historical records.
China's steel mills and its steel lobby body, the China Iron and Steel Association (CISA), have accepted the mechanism of quarterly iron ore pricing, the report said. In January, the Australian miner BHP Billiton Ltd moved to a monthly set-pricing system after three mining companies abandoned a 40-year tradition of annual iron ore negotiations in March 2010 and turned to a quarterly pricing mechanism linked to iron ore indexes.
The CISA has previously insisted that Chinese steel mills should have long-term iron ore prices, which could stabilize their raw material costs.
The report said this year's negotiations are no longer about whether to accept quarterly pricing, but have shifted to freight costs. Shipping costs from Australia to China can vary widely, from $6 to $50 per ton.
The big three miners, BHP, Vale SA, and Rio Tinto Group currently offer FOB (free on board) prices to Chinese steelmakers, while the world's major three iron ore indexes calculate CFR (cost, freight) prices, using a formula based on the average spot market price over the previous quarter.
According to historical records, ocean freight costs will fall before the annual negotiations, but once they are completed, the price is likely to rise dramatically.
The recent rally in spot iron ore prices is likely to push up second-quarter contract rates to a record $165 a ton for ore FOB from Australian mines with an iron content of 62 percent, a Reuters poll reported.
Platts' 62 percent iron ore remains at $187.3 a ton, including freight, delivered to China, a record reached last week.
The Steel Index (TSI) 62 percent iron ore benchmark was also steady at $185.6 and Metal Bulletin's 62 percent ore was unchanged at $183.4.
The CISA is in discussion with Australian miners about the stabilization of freight charges to reduce volatility and keep costs stable, said an executive with a State-owned steelmaker, who declined to be named as the issue is sensitive.
The Brazilian company, Vale, in 2009 signed independent ore contracts with Chinese steel mills for fixed freight charges to further expand its presence in the country.
Some Chinese steelmakers have signed pricing contracts valid for three to four years with Vale for fixed freight, according to earlier reports.
Unlike BHP and Rio, which ship ore from Australia, Vale needs to transport iron ore from Brazil to China, resulting in much higher freight costs.
Vale is building 16 large ore carriers to reduce transportation costs between China and Brazil.
Freight costs from Brazil to China can vary from $10 to $110 per ton, based on historical records.
Steel production will be limited by Queensland coking coal supply
Coking coal shortages caused by flooding in Queensland will limit crude steel production in 2011, McCloskey Group md Gerard McCloskey told delegates at the Investing in Africa Mining Indaba in Cape Town.
So far the floods have reduced coking coal supply by around 15 million tonnes, he said. This compares with the 5-6 million tonnes of supply lost during heavy rains in Queensland during 2008.
And, just like 2008, heavy rains could cause more problems for coking coal miners in February, McCloskey continued.
“The rainy season is not by any means over in Australia,” he said.
Miners in Canada, the USA and Mongolia will all export more material in an attempt to plug the gap, McCloseky predicted.
But this material will be lower grade and will not be sufficient to satisfy the deficit.
So far the floods have reduced coking coal supply by around 15 million tonnes, he said. This compares with the 5-6 million tonnes of supply lost during heavy rains in Queensland during 2008.
And, just like 2008, heavy rains could cause more problems for coking coal miners in February, McCloskey continued.
“The rainy season is not by any means over in Australia,” he said.
Miners in Canada, the USA and Mongolia will all export more material in an attempt to plug the gap, McCloseky predicted.
But this material will be lower grade and will not be sufficient to satisfy the deficit.
Iron Ore-Shanghai rebar hits record for 4th day, iron ore up
By Manolo Serapio Jr
SINGAPORE Feb 10 (Reuters) - Shanghai steel rebar futures rose to a record for a fourth straight day on Thursday, boosted by surging cost of iron ore as top consumer China resumed buying after a week-long Lunar New Year holiday on expected firmer steel demand.
The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange was up 0.7 percent at 5,159 yuan a tonne by 0235 GMT, just off a peak of 5,161 yuan.
"Whoever's buying rebar futures still thinks steel prices will rise and if that's the case then it will mean that spot steel prices will also rise and mills will have more money to buy raw material," said a Shanghai-based iron ore trader.
Platts' 62 percent iron ore index .IO62-CNI=SI, which global miners Vale and Rio Tinto mostly use in deciding quarterly contract prices, rose $1.50 to a record $188.75 a tonne, cost and freight, on Wednesday.
Tight supply of the steelmaking ingredient has fueled a rally in iron ore prices since the year started, with Brazilian and Australian cargoes hampered by weather problems and Indian exports cut by a ban on shipments from its Karnataka state.
"I think prices will continue to rise. Supply's still tight and unless something changes on that front, gains will be sustained," said the Shanghai trader.
Two other price indexes also rose to near record highs on Wednesday. The Steel Index 62 percent iron ore benchmark .IO62-CNI=SI gained 70 cents to $186.40 a tonne and Metal Bulletin's 62 percent gauge .IO62-CNO=MB climbed 75 cents to $184.11.
Key to further price gains will be an Indian court ruling due in mid-February, when the country's Supreme Court will decide on whether to lift the Karnataka ban, in force since late July.
"The lifting of the ban will definitely lift exports and at some point will at least slow the rally that we have seen," said Christopher Ellis, index analyst at Metal Bulletin.
"The actual impact on prices will depend on the timing of the ban lifting and how quickly the Indian mines can ramp up exports of material." (Editing by Ed Lane)
Uluslararası çelik hurda pazarındaki gelişmeler
Steelorbis - ÇARŞAMBA, 09 ŞUBAT 2011
Dünyanın en büyük hurda ithalatçısı olan Türkiye'nin hurda alımlarını durdurması ve ikinci büyük ithalatçı olan Çin'in yeni yıl tatilinde olması, global hurda ticaretini durma noktasına getirmiştir. Talebin bu denli zayıf olması, hurda fiyatlarında önlenemez bir düşüşe yol açmaktadır.
ABD'li bazı piyasa oyuncuları, şubat ayı başında yaklaşık 25$/mt civarında azalan ABD iç piyasasındaki hurda fiyatlarının, ihracat piyasalarındaki talebin toparlanmaması durumunda, ay içerisinde bir miktar daha gerileyebileceğini belirtmektedirler. Türkiye'de ABD çıkışlı olarak net bir fiyat teklifi duyulmamakla birlikte, HMS I/II 80:20 hurda için fiyat seviyesinin 480$/mt CFR seviyelerinin altında olabileceği SteelOrbis'e gelen bilgiler arasındadır.
Avrupa iç piyasasında da hurda fiyatları düşüş kaydetmektedir. Düşen fiyatlarla beraber, hurda alımlarını durduran İspanyol üreticilerin gözü Türkiye'de olup, Türk üreticilerin alıma geçeceği seviyeyi beklemektedirler. Türkiye'de Avrupa çıkışlı HMS I/II 70:30 hurda 457$/mt CFR seviyesinden teklif edilmektedir.
Karadeniz'de hurda toplama fiyatları da, hurda fiyatlarındaki düşüşe hızla reaksiyon vererek düşüş göstermiştir. Türkiye'de Karadeniz çıkışlı A3 hurda için yaklaşık 450$/mt CFR seviyelerinden düşük tonajlı alımların gerçekleştiği duyulmaktadır.
Türk üreticilerin alımda olmaması dolayısıyla, hurda tedarikçilerinin de teklif vermedikleri görülmektedir. Birçok tedarikçinin pozisyonu olduğu, ancak teklif vermeyerek Türk üreticilerin alıma geçmesini bekledikleri duyulmaktadır. Bu durum da piyasada net bir hurda fiyat seviyesinin oluşmasına engel olmaktadır. Orta Doğu'daki siyasi belirsizlik ve mamul tarafında talebin gerek iç piyasa gerekse ihracat piyasalarında zayıf olması ise, Türk üreticilerin hurda fiyat seviyesini belirlemelerini zorlaştırmaktadır. Mamul tarafı netlik kazanmadan, Türk üreticilerin hurda alımlarını minimum düzeyde götürmeye devam edecekleri, hatta bir miktar üretim kısıntısına bile gidebilecekleri SteelOrbis'e gelen duyumlar arasındadır.
Wednesday, February 9, 2011
Brazil MMX CEO: Recent Deals Imply Higher Long Term Iron Ore Prices
RIO DE JANEIRO -(Dow Jones)- Recent mergers and acquisitions in the global iron ore industry suggest higher long-term iron ore prices, the chief executive of Brazilian mining and metals company MMX Mineracao e Metalicos SA (MMXM3.BR) said Wednesday.
MMX Chief Executive Roger Downey said during a conference call with investors that the recent C$4.9 billion bid for Consolidated Thompson Iron Mines Ltd. (CLM.T) made by Cleveland-based Cliffs Natural Resources Inc. (CLF) implied a long-term iron ore price of $100 per metric ton.
"That's a huge indicator" of the future direction of iron ore prices," Downey said, underscoring that some estimates of lower iron ore prices were unfounded.
"That's got to shake the earth," Downey said. "That shows the market that $60 a ton is not going to happen."
Downey noted that iron ore prices will need to stay higher in the future because of costs associated with developing some of the world's iron ore deposits. MMX is well positioned because of the low development costs of its mining sites, Downey added.
While MMX is doing due diligence on possible acquisition targets in three or four different areas, the company is focused on developing its own assets and pushing its production to 50 million metric tons.
"The company's story is not just about consolidation. We have a fantastic array of projects and we're going full speed ahead with those projects," Downey said.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085;
Back on top! RMG’s metal price forecasts, 2011
London, 7 February 2011
RMG forecasts another strong year in metal price increases at a rate similar to 2010, after which prices are expect to increase at a slower rate in 2012 and be maintained at 2012 levels throughout 2013. From 2013 to 2015 metal prices are expected to soften due to the arrival of new supply although the RMG index is not expected to drop below current levels, implying continued high metal prices for the long term.
On-going industrialisation and urbanisation of emerging markets will ensure a high demand regime for at least the forthcoming decade. Increased infrastructure spend, such as increased power grid investment in China and a budding material intensive consumer consumption, as typically the expanding auto-sector in both China and India supports this assumption, thus spreading demand across all base metals and all emerging economies.
Raw Materials Group (RMG) regularly compiles forecasts for base and precious metals. Combining these forecasts RMG constructs its RMG metal price index.
Last year, 2010 the RMG index surpassed the 2007’s peak. The general recovery from the global financial crisis was expected but what has been surprising is the speed and strength of the recovery. RMG expect the trend to continue with a price level in 2011 similar 2010 with a slowing though still increasing price level in 2012. The rationale behind this is the pause in mine development, both for new mines and existing mine expansions, and hence supply increases from 2008 to 2010.
Of the specific metals, gold drew a particular following in 2010 reaching record weekly average highs from week 35 until the end of 2010, based mostly on investor demand shifting from paper to metal as currencies depreciated and government bonds took a hammerings. But the real standouts were silver and palladium, up from 14.58 and 261 USD/oz in 2009 to 20.23 and 529 USD/oz in 2010 respectively. The precious metals are again expected to increase this year and next, with particular higher prices expected for platinum and palladium due to continuing strong demand from China´s automotive industry. In fact RMG´s long term forecast for these two metals is bullish out until 2015 (whereas the other base and precious metals are expected to soften from 2013 onwards).
Of the base metals copper is the expected standout performer due to continuing supply shortages and maintained strong global demand forecast. This maybe further accentuated with the arrival of copper EFTs. For 2012 zinc is the forecast strong performer due to tightness in the metal balance driven again by shortfalls in supply as production from existing mines decreases and is not replaced by additional supply. RMG’s nickel price forecasts increases over the next two years are subject to further delays in the technically difficult but large metal output high pressure acid leach operations coming online later than scheduled. If the likes of Goro and Ambatovy are successfully commissioned in 2011 then nickel will enter a bear market.
RMG metal price forecasts
2010 | 2011 | y-o-y | 2012 | y-o-y | ||
Copper | USD/ton | 7553 | 9600 | 27.1% | 10000 | 4.2% |
Zinc | USD/ton | 2161 | 2400 | 11.1% | 2800 | 16.7% |
Nickel | USD/ton | 21852 | 25000 | 14.4% | 27000 | 8.0% |
Lead | USD/ton | 2149 | 2500 | 16.3% | 2700 | 8.0% |
Gold | USD/oz | 1226.6 | 1500 | 22.3% | 1550 | 3.3% |
Silver | USD/oz | 20.23 | 30 | 48.3% | 28 | -6.7% |
Platinum | USD/oz | 1611.17 | 1850 | 14.8% | 1950 | 5.4% |
Palladium | USD/oz | 528.52 | 830 | 57.0% | 900 | 8.4% |
Iron ore contract price seen hitting record $165/T in Q2
London, February 2011
Iron ore contract prices are expected to jump to a record $165 per tonne in the second quarter, reflecting soaring spot prices buoyed by tight supplies and robust demand from top importer China, a Reuters poll showed. The projected second-quarter price for Australian fines with 62 percent iron content, free on board, represents the median in a poll of 10 analysts. It would mark a 17 percent rise from January-March and the biggest contract price since the industry shifted to quarterly pricing last April after ditching a 40-year-old annual system.
Contract prices are forecast to peak in April-June before easing over the following quarters as global supplies recover, the poll showed. For the year, contract prices are seen climbing 25 percent to $153 a tonne.
Increased global steel output, firm Chinese demand and tight supplies should boost iron ore prices this year, said Mark Pervan, senior commodity analyst at Australia and New Zealand Bank.
"There's a lot of dynamics suggesting there's probably more upside risks to prices than downside risks. There is supply coming online but we're still maybe one to two years away from some of the larger expansion coming through."
Spot iron ore prices have rallied since the start of 2011, pushing key indexes to record levels above $180 per tonne IODBZ00-PLT .IO62-CNI=SI and pointing to higher contract rates for the second quarter.
* Tight supplies, strong China demand behind surge
* Contract price seen at average $153/T in 2011, up 25 pct
* Prices seen falling in 2012 as supply rises
Vale and Rio Tinto , the world's two biggest iron ore miners, fix their quarterly contracts using index-based prices in the past three months a month before the start of a new quarter.
UNSUSTAINABLE?
Tight supplies from India, the world's No. 3 iron ore exporter which sells nearly all of its material via the spot market, had helped spur the rally in prices.
India's southern Karnataka state had banned iron ore exports since July and another state, Orissa, the country's biggest producer, is also looking at halting exports to preserve more of the material for domestic steelmakers.
India's Supreme Court is due to decide by mid-February on whether to lift the Karnataka ban and analysts say removing the ban could sap the rally in iron ore prices and weaken Orissa's bid.
That could see spot prices drop from the second quarter, suggesting lower contract prices for July-September, analysts said. This year's projected additional seaborne supply of 20 million tonnes, expected to come onstream in the second quarter, should also knock prices off record levels, they said.
"There's a potential for correction into the March and April period," said Graeme Train, commodity analyst at Macquarie in Shanghai.
"China's steel production will probably peak out around that time and iron ore inventories will be relatively high by then, so you'll probably see things cooling off a little bit."
Iron ore prices may peak this year and fall from 2012 as new supply comes into the market, said Colin Liang, analyst at Bank of America-Merrill Lynch in Hong Kong, who expects contract prices to drop 8 percent next year from 2011, on average.
Global seaborne supply of the key steelmaking component has been increasing by 20 million to 40 million tonnes in recent years, but production expansion plans by global miners Vale, Rio Tinto and BHP Billiton could boost annual supply by around 100 million tonnes starting 2012, analysts said.
More supply and a potential slowdown in steel demand from China, the world's biggest consumer and producer of the alloy, due to policy tightening "would mean that current prices may be unsustainable," said Paul Galloway, senior mining analyst at Sanford Bernstein.
A shortage in coking coal, another ingredient in producing steel, after floods ravaged top exporter Australia, could also cut steelmaking and therefore dent demand for iron ore, said Galloway.
Australia accounts for almost two-thirds of the world's metallurgical coal exports, most of it destined for steel producers in Asia.
US export shredded scrap prices decline; domestic deals flat
New York (Platts)--7Feb2011/522 pm EST/2222 GMT
The Platts price assessment for US shredded ferrous scrap export fell $30/lt Monday to a new midpoint of $435/lt, reflecting waning overseas demand and paralleling a $20/lt drop in the price of February domestic shredded.
One Southeast scrap dealer said that although he had bids from buyers in India for shredded at $420/lt FAS port of Savannah, Georgia, he would need at least $440/lt FAS to do as well as his domestic shredded sales, which were concluded at $455/lt delivered to local mills.
Sales into Asia at about $500/lt CFR for shredded net to about $430/lt FAS, he said, after deducting $60/lt in freight and another $10/lt in handling charges, still insufficient to draw tons away from domestic buyers.
So far, the Southeast scrap dealer said all his shredded sales have been domestic and he has completed more than 80% of his February sales. If prices stay at current levels, he does not anticipate sending any tonnage offshore. With some local mills out of the market due to ample scrap inventories or production outages, he may sell fewer tons than in January, he said.
The Southeast dealer thinks prices could move downward in March. "It may give back again in March," he said, with a stable supply side in the Southeast and less export demand to absorb tonnage not taken by domestic mills.
Inbound scrap flows in the Northeast have been more affected by harsh winter weather conditions than yards in the South, where the Southeast dealer said things were not as bad.
Meanwhile, the Platts assessment for domestic shredded was unchanged at $455/lt delivered Monday, trading in a range of $450-460/lt delivered to Midwest mills.
An Ohio Valley scrap dealer said he sold his domestic February shredded scrap at $455/lt delivered mill gate in the Pittsburgh/Cleveland area, reinforcing what appears to be remarkably uniform pricing across regions in the eastern US.
Heavy melting scrap No. 1 sold at $415/lt delivered, said the Ohio Valley scrap dealer, and cut plate and structural went for $440/lt delivered.
Plate/structural scrap is in tighter supply lately because it is largely a product of building demolition activity, which has been slow in the US due to the depressed construction and real estate markets.
One Southeast scrap dealer said that although he had bids from buyers in India for shredded at $420/lt FAS port of Savannah, Georgia, he would need at least $440/lt FAS to do as well as his domestic shredded sales, which were concluded at $455/lt delivered to local mills.
Sales into Asia at about $500/lt CFR for shredded net to about $430/lt FAS, he said, after deducting $60/lt in freight and another $10/lt in handling charges, still insufficient to draw tons away from domestic buyers.
So far, the Southeast scrap dealer said all his shredded sales have been domestic and he has completed more than 80% of his February sales. If prices stay at current levels, he does not anticipate sending any tonnage offshore. With some local mills out of the market due to ample scrap inventories or production outages, he may sell fewer tons than in January, he said.
The Southeast dealer thinks prices could move downward in March. "It may give back again in March," he said, with a stable supply side in the Southeast and less export demand to absorb tonnage not taken by domestic mills.
Inbound scrap flows in the Northeast have been more affected by harsh winter weather conditions than yards in the South, where the Southeast dealer said things were not as bad.
Meanwhile, the Platts assessment for domestic shredded was unchanged at $455/lt delivered Monday, trading in a range of $450-460/lt delivered to Midwest mills.
An Ohio Valley scrap dealer said he sold his domestic February shredded scrap at $455/lt delivered mill gate in the Pittsburgh/Cleveland area, reinforcing what appears to be remarkably uniform pricing across regions in the eastern US.
Heavy melting scrap No. 1 sold at $415/lt delivered, said the Ohio Valley scrap dealer, and cut plate and structural went for $440/lt delivered.
Plate/structural scrap is in tighter supply lately because it is largely a product of building demolition activity, which has been slow in the US due to the depressed construction and real estate markets.
US ferrous heavy melting scrap for export drops $30/lt
New York (Platts)--8Feb2011/552 pm EST/2252 GMT
The Platts price assessment for heavy melting scrap exported from the US fell $30/lt Tuesday to a new midpoint of $405/lt delivered to East Coast export docks, reflecting softer export demand and mirroring a $30/lt drop in export prices for US shredded ferrous scrap.
A Northeast scrap dealer told Platts that bids at the docks for heavy melt are now $400-410/lt delivered. "Export got whacked more than domestic," he said, referring to the larger decline in scrap export prices compared to the $20/lt drop in domestic prices recorded last week when the Platts price assessment for shredded scrap dropped to a new midpoint of $455/lt delivered to Midwest mills.
Domestically, the Northeast dealer sold heavy melt for about $410/lt delivered mill gate, netting him a higher FOB yard price for his tons and explaining why so little scrap has gone to the docks -- dealers can do better by selling domestically. "All my February sales were domestic," he said, after having sold some export tonnage in January when prices were at their peak. Cut plate and structural scrap, he said, sold for about $440/lt delivered mill gate.
A Midwest scrap dealer cited February ferrous prices in line with those of others. He sold shredded at $455/lt delivered Midwest mill, while heavy melt, the weakest grade in February due to receding export demand, sold domestically for $410-415/lt delivered mill gate. Cut plate and structural scrap, in shorter supply due to an overall lack of demolition activity, sold at $440-450/lt delivered.
Attending the Institute of Recycling Industry's Gulf Coast Chapter meeting in St. Louis, he described the overall tone as positive. "The mood here in St Louis is OK--there is no overall pessimism," he said. For the most part, save a few overly dramatic tales of woe, people are happy, he said, as scrap dealers are seeing profits from recent robust prices while steelmakers are also mostly content, having been able to push through recent price increases.
A Northeast scrap dealer told Platts that bids at the docks for heavy melt are now $400-410/lt delivered. "Export got whacked more than domestic," he said, referring to the larger decline in scrap export prices compared to the $20/lt drop in domestic prices recorded last week when the Platts price assessment for shredded scrap dropped to a new midpoint of $455/lt delivered to Midwest mills.
Domestically, the Northeast dealer sold heavy melt for about $410/lt delivered mill gate, netting him a higher FOB yard price for his tons and explaining why so little scrap has gone to the docks -- dealers can do better by selling domestically. "All my February sales were domestic," he said, after having sold some export tonnage in January when prices were at their peak. Cut plate and structural scrap, he said, sold for about $440/lt delivered mill gate.
A Midwest scrap dealer cited February ferrous prices in line with those of others. He sold shredded at $455/lt delivered Midwest mill, while heavy melt, the weakest grade in February due to receding export demand, sold domestically for $410-415/lt delivered mill gate. Cut plate and structural scrap, in shorter supply due to an overall lack of demolition activity, sold at $440-450/lt delivered.
Attending the Institute of Recycling Industry's Gulf Coast Chapter meeting in St. Louis, he described the overall tone as positive. "The mood here in St Louis is OK--there is no overall pessimism," he said. For the most part, save a few overly dramatic tales of woe, people are happy, he said, as scrap dealers are seeing profits from recent robust prices while steelmakers are also mostly content, having been able to push through recent price increases.
Global Steel Prices News Update
It is reported that steel market at Black Sea is heavily influenced by the political crises in Middle East. The situation has already directly influenced longs segment and created some uncertainties for flats segment.
The already weakening market for semis and rebars etc has been further hit this week.
As per market reports, steel billet quotations lost almost USD 30 per tonne to USD 40 per tonne.
Rebar prices also lost USD 10 per tonne to USD 30 per tonne.
Except decrease of market size by itself and chain reaction due to needs of products relocation.
It is also reported that terms and conditions of supplies to Middle East and further to Asia have been already impacted by higher insurance costs because of risk factor.
It is not clear as yet that how will the market and sellers react within allocation of larger volumes.
Flats products seem to be not seriously influenced yet, but future dynamics and impact are not clear. Although Ukrainian producers have given up their stance to realize more and more WoW and have started to look at numbers lower by USD 10 per tonne to USD 20 per tonne for HRC.
The already weakening market for semis and rebars etc has been further hit this week.
As per market reports, steel billet quotations lost almost USD 30 per tonne to USD 40 per tonne.
Rebar prices also lost USD 10 per tonne to USD 30 per tonne.
Except decrease of market size by itself and chain reaction due to needs of products relocation.
It is also reported that terms and conditions of supplies to Middle East and further to Asia have been already impacted by higher insurance costs because of risk factor.
It is not clear as yet that how will the market and sellers react within allocation of larger volumes.
Flats products seem to be not seriously influenced yet, but future dynamics and impact are not clear. Although Ukrainian producers have given up their stance to realize more and more WoW and have started to look at numbers lower by USD 10 per tonne to USD 20 per tonne for HRC.
Nickel Price Hits US$28,000/ton February 8 2011
February 8, 2011
The Nickel price has broken US$28,000/ton on the LME to reach the highest record in the past two years after Chinese Lunar New Year.
Market analysts believe the price of stainless steel will jump up sharply due to rising cost on raw materials.
It’s known that the nickel price hit US$26,000/ton in the end of January; thus, Taiwan’s major stainless steel mills such as Yieh United Steel Corp. (Yusco), Tang Eng and Walshin Lihwa have announced to raise the stainless steel prices accordingly.
So far, the current inventory of stainless steel has been at low level. It is expected that buyers would return to market to purchase after Chinese Lunar New Year.
News Source www.yieh.com
MEPS Expects European Steel Prices to Increase Feb 8 2011
According to report of MEPS released in late January, the steel demand from European end user market is still sluggish.
However, most of steel producers in Europe are going to increase their steel prices for second quarter of 2011 as a result of soaring costs on raw material and energy.
Also, MEPS expected the prices of iron ore will keep skyrocketing, affected by devastating floods in Australia that is determining the production of coking coal.
Besides, the company believed that European steel distributors will start to purchase in next few months for restocking promptly; accordingly, it is the time to rebound for the steel demand in European end user market.
Hence, MEPS expected the steel prices in Europe could hike sharply in the first half of 2011.
US FeMo prices exceed $20 per lb
Ferromoly prices in the US inched up to $19.80-20.20 per lb from $19.75-20, based on several transactions. In Europe, there continues to be buyer resistance at $44 per kg although inter-trade business has been done at above $44. Briquette prices are still at a considerable premium to oxide prices, which have held steady at $17.40-17.60 per lb. Briquette sales to consumers were reported at $18.50-18.75 per lb. Briquettes are tight, suppliers say, but no one is concerned about oxide availability.
FeV prices firm to $13.50-14.00 per lb
Ferrovanadium prices rose to $13.50-14.00 per lb compared to $13.30-13.80. Less than truckload sales were reported as high as $14.50. European prices were steady at $30.50-31.50 per kg. While there is not much spot buying activity taking place in Europe or the US, supply is fairly tight, sources said, because contract customers are taking their full allotments.
India ferro-alloys sector calls for import duty rise
LONDON (Metal-Pages) 09-Feb-11. The Indian Ferro Alloy Producers' Association (IFAPA) has called on the national government to increase import duties on ferro-alloys to protect the domestic industry, according to national press reports on Wednesday.
The IFAPA says it wants the current import duties on ferro-alloys, with the exception of ferro-nickel which is 100% imported, to increase to 7.5%, from 5%.
“The current level of duty is not sufficient to protect the domestic industry. The government has over the years reduced the duty on ferro-alloys, resulting in domestic players reducing capacity,” IFAPA secretary general T S Sundaresan said in a report in The Business Standard.
If the government will not increase the import duty then the IFAPA says the import duty on manganese ores should be scrapped, from currently 2%, according to The Times of India.
The Indian ferro alloys industry has a production capacity of 4.04 million tonnes, which is enough to meet a domestic need to produce more than 120 million tonnes of steel a year, it said.
The government had been cutting its ferro-alloys import duty since 2005, finally bringing it down to nil by 2009.
However, it reintroduced the duty to 5% later that year after calls from the domestic industry that pointed to a jump in imports to almost 188,000 tonnes in 2009, from some 97,000 tonnes in 2005.
Currently, the Indian ferro-alloys industry is operating at only 65% of its annual production capacity, the IFAPA said, which is also calling for Indian power rates to be cut to a level on par with international prices, which it says are about a quarter of its domestic power costs.
In noble alloys, the IFAPA has called on the government to abolish the current 7.5% import duty on vanadium pentoxide, which is in short supply in India, as well as urging the State to waive customs duties on manganese ore, chrome ore, molybdenum ore/oxide, tungsten ore and wolframite ore.
World manganese demand to hit 22 mln tonnes by 2015
LONDON (Metal-Pages) 08-Feb-11. World demand for manganese is forecast to exceed 21.9 million tonnes by 2015, with the key factors driving market growth to be increased demand from the steel and batteries sectors in Asia-Pacific, Latin America, and the Middle East markets, according to US-based industry analysts GIA (Global Industry Analysts).
The manganese market has been buoyant in the past decade driven on a robust expansion in a world infrastructure sector that has encouraged big-scale production of steel, the key manganese end-user, it said.
However, the recent turmoil in the world economy heavily impacted the manganese market and prices plummeted in 2008 and 2009. The troubled times forced several manganese producers to cut mining and processing operations and focus on implementing cost-cutting measures.
Nevertheless, the market has recovered in 2010 in line with the world economy andemand for manganese is poised to grow at a healthy pace on increasing demand for steel, mostly in the Asia-Pacific region, it said in its report this week.
Most of the world’s manganese resources are found in China, Australia, South Africa, Gabon, Brazil, India, Mexico, and former Soviet nations.
Asia-Pacific represents the biggest, as well as the fastest growing regional market for manganese, it said.
In 2009, China emerged as the biggest producer of manganese in the world.
However, most of the mineral produced in China is low grade and the country relies on imports of high grade manganese for much of its steel production.
Asia-Pacific manganese consumption is forecast to increase at a compounded annual rate of 7.9% in the coming years, it said. Europe represents the second major market. Alloys segment constitutes the biggest manganese product group, while among manganese alloys, ferro-manganese alloys and silico-manganese alloys account for most demand.
Europe ferro-manganese market slips amid quiet demand
LONDON (Metal-Pages) 08-Feb-11. The European ferro-manganese spot market has weakened in the past couple of weeks amid a low level business across the sector, with business not seen picking up until the end of this month, dealers told Metal-Pages on Tuesday.
European high carbon ferro-manganese 75% grade material is €1,050-1,070/tonne, from €1,080-1,120/tonne, while refined grades are about €1,600-1,700/tonne for medium carbon alloy and about €100 more for low carbon material, both off some €70.
“There has been quiet demand in the past three or four weeks,” one dealer said.
“However, not all consumers have covered their raw materials needs through March, so we expect an increase in demand around the end of February, then another couple of quiet weeks before consumers order their quarterly needs for the April-June period.”
Dealers said underlying flat steel demand is healthy and looks set to persist that way through the first half of this year at least. Flat steels are mostly used in car production.
However, in Europe this year, car sales have been mixed. Car sales in the two major European markets ticked up again in January, although fell in others, according to the latest industry data.
In Germany, Europe's biggest car market, new car sales were up 17%, according to the VDA (German automakers association), with particularly strong sales for diesel-powered models.
A key factor in the rise was the falling levels of carbon dioxide emissions for Germany's cars, the VDA said.
French car makers also posted a jump of more than 8%.
However, across the rest of Europe, the picture was more gloomy, with the UK, Europe's third-biggest market, posting a fall in sales of 11.5%.
Ferro-manganese Mn 78% HC delivered European works;
Now: 1080 - 1120 €/t
Previous: 1080-1120 €/t
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