Chinese Steel Consumption for Cars Forecasted to Increase by 2MT in 2010

Japanese ferrous export price to East Asia levels off. The newly contracted price is around FOB 31,500 yen per tonne for H2 this week, higher by 1,500 yen from the previous week. Steel makers in South Korea and China turned inactive to procure additional offshore scrap because they enter Chinese New Year holidays in February. South Korean steel maker has already lowered its offer price to Japanese traders.

Ferrous scrap export contracts between East Asian countries and Japan have strongly increased since late December. Now steel makers in South Korea and China are inactive to purchase Japanese scrap at higher price than the present before long holidays in mid February, said Japanese scrap dealer source.

Hyundai Steel of South Korea lowered its offer price for Japanese H2 by 500 yen to around FOB 31,000 yen per tonne this week. US scrap export price to East Asia is also leveling off this week, which surged to around CFR US$ 380 (approximately 34,000 yen) per tonne last week.

Japanese new export contract price is still higher than domestic scrap market price. Domestic scrap supply is expected to keep tight, said Japanese trader, because scrap shipping from Japanese quays is scheduled from the end of February to early March. Domestic scrap market price is affected by strong export. The trend may continue even though the export price levels off.