Late Friday evening Steel Market Update received a number of messages from our contacts in Asia regarding the Chinese export markets and iron ore pricing. Our sources are telling us the Chinese mills have suddenly suspended providing export offers. Through contacts with a number of the largest steel mills in China the understanding is there will be an announcement some time this week of a settlement to the negotiations regarding the iron ore benchmark pricing Read more ...

SMU expects the U.S. will see more international steel coming into the country over the next two to three months as savvy buyers were able to take advantage of niche offers out of China, India, Taiwan, Korea and Russia. Trading companies are telling us the number of inquiries for international steel has grown but most buyers continue to be wary of placing orders at pricing similar to domestic and lead times which extend out to June Read more ...

Total steel imports (all products) declined in November 2009 compared to the prior month by 15.4% according to final data released by the U.S. Department of Commerce. When comparing November 2009 against November 2008 total steel imports declined by 1,030,246 short tons.

Taking preliminary license data for December into account, 2009 total steel imports is projected to be 16,185,980 short tons. December total tonnage imported was 31,927,000 short tons. Read more ...

Latest Chinese Pricing

Steel Market Update received new Chinese flat rolled steel pricing just prior to the Christmas Holidays. North American customers should note these prices are not necessarily available to the North American markets. Chinese hot rolled is not permitted into the United States. Prices do not include freight, insurance or the trading company margin so you would need to add approximately $100 per ton to cover those costs.

A number of weeks back one of our steel sources located in Asia sent over a report outlining approximately 82 million metric tons of new or refurbished capacity would be coming online in China by the end of 1st Quarter 2010. SMU spoke to a number of steel analysts here in the U.S. who had contacts in Asia and they could only identify approximately 50 million metric tons of new or refurbished capacity.

Today I received new information from China which we would like to share with our readers:

Steel Market Update received a call earlier today (Wednesday) from a trading company who had some legitimate concerns regarding the information SMU provides to our members regarding pricing. Their concern was we were perhaps sharing too much information which was putting them into a disadvantaged and sometimes unfair situation as they negotiate with their customers. Read more ...

SMU tends to breeze through or not read at all the other steel-related periodicals. We feel they do a good job for their niche and in some ways may be a compliment to our publication. We managed recently to skim an issue of the American Metal Market and came across the following “Letter to the Editor.” Normally, I wouldn’t dare print (or reprint) an AMM article without permission. However, this is an open letter to the steel community written by a steel analyst with some following and stature in the industry. Read more ...

SMU happens to have contact with a U.S. based steel buyer traveling in Asia looking for steel export opportunities and getting a feel for the landscape and mood in Asia. Here is a portion of what they had to say late last week:

“Construction appears to be booming around Shanghai. A world expo will be held here in May 2010 and there is much construction ahead of the Expo. Funny thing is you see tons of cranes but very little actual work except on the government projects. Read more ...

Getting the News Not Quite Right

I received a request from MetalMiner (agmetalminer.com) for an interview regarding the information contained in a recently published article on the U.S. steel business by The TEX Report, Ltd. which is the only English produced newsletter dedicated to the steel industry in Japan. The TEX Report published an article about the U.S. integrated steel mills and the number of blast furnace accidents which, according to The TEX Report have caused a new deterioration in steel supplies for North American customers. The article was picked up by another newsletter called Steel Trade Today (Steel Guru) and broadcast around the world.

Based on preliminary import license data from the U.S. Department of Commerce, Import Administration - flat rolled steel imports for the month of August increased by 25.4%.

Imports of hot rolled, cold rolled and galvanized sheet total 248,279 metric ton (273,680 short tons) for the month of August (again these are preliminary import license numbers) compared to 185,319 metric tons (204,278 short tons) received during the month of July. Read more ...

President Obama took a big step toward the protectionist hall of infamy when he invoked a previously unused trade law to impose stiff tariffs on Chinese tires last week. But the law at issue in that case is far from the only legal tool available to U.S. protectionists. For an example, look no further than steel. Read more ...

Say What?

The lead on the front page of the Wall Street Journal – “Big miners and steelmakers are pushing for a quarterly, rather than annual pricing system, which could make steel prices more volatile.”

Hello, I don’t know about you guys – but I think prices here in the U.S. have been about as volatile as humanly possible – especially over the past 18 months (and counting). Read more ...

I just read this article out of Australia regarding the Chinese iron ore negotiations. I want to remind everyone Steel Market Update's main Asia source predicted the failure of the Chinese in these negotiations. One of our analyst friends here in the United States told me recently it is not unusual for the government to get involved with negotiations (like the iron ore negotiations going on now) and ending up paying a premium over what they could have gotten. Read more ...

Many of you are probably well aware of the detention of one of the negotiators for the Australian iron ore mining company - Rio Tinto. The Rio Tinto employee has been accused of stealing "state secrets" by the Chinese government. I asked one of my contacts in Asia what the steel people in China/Taiwan think is happening - this is the response I got: