Cold Rolled Sheet Supply Tightens in Asia

Supply of cold rolled steel sheet is tightening in Asia due to active demand from automobiles and electric appliances in China or South Korea. The users are increasing the orders to Japanese integrated steel makers. Japanese steel makers are increasing cold rolled sheet export while reducing the output to domestic market since their annealing capacity is shortening.

Under the tight supply and demand balance, Asian users are approving Japanese steel makers’ price hike offers by around US$ 40 per tonne for January-March shipment from the previous quarter.

Annual car sales are expected to reach 13 million cars in China in 2009, 3 times of Japanese market. In China, the demand is also steady for home appliances such as refrigerators or laundry machines.

It is said that steel inventory is excess in Chinese market. But cold rolled sheet inventory is short because the number of high quality product suppliers is small in the country, according to Japanese large dealer source.

South Korean manufacturers, Hyundai Motor or LG Electronics, are increasing their outputs to China. POSCO, South Korean largest steel maker, is said to be increasing material supply to domestic manufactures while reducing export to Asia.

A source of Japanese integrated steel maker points out another factor that firm demand for tin plate in Asia is also causing capacity shortage of cold rolling mills.

Bao Steel, Chinese largest steel maker, raises the selling price of cold rolled sheet to domestic market in January by 550 yuan per tonne and by 300 yuan for hot rolled and pickled sheet. Japanese large dealer source explained Bao Steel changed the hike range by products considering the supply and demand balance.