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Sunday, Sep 02, 2007
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Business Daily from THE HINDU group of publications Sunday, Sep 02, 2007 ePaper |
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Steel Industry & Economy - Steel
Prices for hot rolled and cold rolled coils have been raised by $5 a tonne. Low service centre inventories and decline in imports from China reflect a favourable condition.
S. Shanker Mumbai, Sept. 1 Steel prices are set to rebound with the US markets showing signs of recovery and China recording rise in prices and lower exports after scrapping of duty rebates and imposition of export tax. This, analysts say, will primarily benefit domestic steel majors such as Tata Steel, JSW Steel and the Steel Authority of India. According to World Steel Dynamics data, hot rolled coil (HRC) prices in the US showed the first signs of recovery as prices increased by $5 per tonne, compared with $65 a tonne slide in the past three months. Cold rolled coil (CRC) prices too, rose by $5 per tonne after reporting a $66-dip in the past three months. As of now, the average HRC price is $565 a tonne and CRC prices $658 a tonne, says Mr Vishak Chandak, Research Analyst, Emkay Share and Stock Brokers Ltd. Analysts expect Arcelor Mittal’s US operations to take the lead and announce a hike of around $20 a tonne for flat products. Low service centre inventories and a decline in imports from China reflect the favourable condition that the US markets expect in the second half of the calendar year 2007. According to WCI Steel Inc, service centre inventory reports from Metals Service Centre Institute suggest that the inventories at the service centres were the lowest since March 2006. At that time, the average HRC price in the US was $618 a tonne, which went up to $698 a tonne in July 2006, before inventories rose and imports from China accelerated substantially due to export duty rebates. Mr Chandak said with such favourable conditions price hikes could be expected this month. Europe prices stabilising
HRC prices in Western Europe reportedly increased for the first time in the last three months after stabilising last fortnight. The average HRC price now is around $670 a tonne and CRC $766 per tonne. CRC prices increased over the last one-and-a-half months by $20. Turnaround
The key turnaround was seen in China where prices have been increasing substantially over the last one-and-a-half months. Average HRC prices increased by $58 a tonne from $402-$460, whereas the average CRC prices rose by $18 from $529 to $547 in the corresponding period. Plates and rebars showed significant strength in pricing in China over the last two months on the back of a growing demand from the shipbuilding and construction sectors. Average plates prices have moved by $49 a tonne over the last two months and rebar prices by $45 per tonne during the corresponding period. Prices rose in China after the scrapping of export duty rebates on most steel products and imposition of export tax on various steel intermediaries. Further, pressure due to increase in scrap price and spot prices of iron ore pushed up the prices, Mr Chandak said.
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