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Steel Output Cut in China Spurs Prices, Has `Big' Impact, Tokyo Steel Says |
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administrator |
DATE |
2010-09-24 16:40:51 |
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Steel Output Cut in China Spurs Prices, Has `Big' Impact, Tokyo Steel Says
Fri. 24 Sep. 2010
Steel production cuts by China, the largest maker of the metal, is having a “big” impact on the market and is boosting prices, said Tokyo Steel Manufacturing Co.
Tokyo Steel may raise domestic prices for November, and leave them unchanged for October to monitor the market, Managing Director Naoto Ohori said in an interview. The company is Japan’s biggest maker of steel from scrap.
Power restrictions in China may trim steel supply in the nation by 9.6 percent for the rest of the year, adding to reduction from the closures of obsolete plants, according to Mysteel Research Institute. Chinese benchmark steel prices have gained about 13 percent in the past two months.
“China’s domestic prices are going up, and export prices are also rising,” Ohori said. “The impact of output cuts by mills in China, the largest producer, is big.”
Tokyo Steel shares gained 0.4 percent to 987 yen at the 3 p.m. trading close on the Tokyo Stock Exchange, taking the year’s loss to 5.6 percent. The Nikkei 225 Stock Average has dropped 9.8 percent this year.
Baoshan Iron & Steel Co., China’s biggest publicly traded steelmaker, yesterday raised October prices for its benchmark products for the first time in five months after production in the nation fell.
“Steel prices in China typically are faster to move up than anywhere else in the globe,” industry analyst Michelle Applebaum said in an e-mailed note yesterday. “We’re seeing another surge in Chinese steel prices in the past week, with 12 increases and zero cuts.”
H-Beam Prices
Tokyo Steel will likely maintain prices of H-beam, used in construction, at 72,000 yen ($851) a metric ton and 64,000 yen for hot coil for October unless there’s a “radical change” in the business environment, Ohori said. The company will announce prices on Sept. 21, he said.
“We were thinking of cutting prices earlier on the assumption raw material prices would decline, but actually they didn’t,” he said. “There may be a greater chance to raise prices” for the November contract because of the rebound in the Chinese steel market, he said.
China, the world’s largest energy consumer, started restricting power to mills this month to meet energy efficiency targets. The nation has cut energy consumption per unit GDP by 15.6 percent from 2006 to 2010, below its target of a 20 percent reduction, according to JPMorgan Chase & Co.
Export orders for Japanese steel gained 5.7 percent in July from the previous month, helping to offset slowing domestic demand, according to figures from the nation’s steel federation.
Source from Bloomberg |
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