Asian Sheet Steel Market to Keep Weak under Oversupply

Asian sheet steel market price is still in slump due to the oversupply when Hyundai Steel of South Korea started new hot strip mill operation while manufacturing demand slows even for Chinese office automation equipment applications. Southeastern Asian inventory level is high for current demand. The sheet steel market price shows no sign to recover.

The spot market price is around US$ 600 per tonne for hot rolled coil, US$ 670-680 for cold rolled coil and US$ 780 for eletrogalvanized steel. The price decreased by more than US$ 200 compared with the peak in spring.

The price in China shows some sign to hit bottom when the steel makers aim to increase the price to improve the profitability. However, Baoshan Iron & Steel left the price unchanged in December. The price move is still uncertain.

Iron ore cost could increase again in January-March. Japanese source said iron ore quarterly price would be more than US$ 135 per tonne for January-March, which is near 10% higher than US$ 127 in October-December.

Japanese integrated steel makers try to increase the export price when higher yen rate and lower steel market price impacted on their profitability and expected higher raw materials cost should squeeze the margin more. A trading firm source said cold coil and some items shows sign to hit bottom in Asian market but the suppliers are still in severe competition.