Negotiations on NO Sheets for China settled at levelling off for Feb shipment

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Publish time: 23rd January, 2014      Source: ChinaCCM
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According to a source, the Japanese mills' negotiations on non oriented electrical steel sheets for China seem to have been concluded almost at levelling off of prices although some were settled at an increase in prices.

In case of January shipment, there were the cases that those prices rose by USD 20 to USD 30 and exceeded USD 750 CFR and following these, the cases to have exceeded this level increased.

China's prices of NO electrical sheets fell below USD 650 CFR for a time. It was the result that too many electrical sheet mills were set up, fiercely competed each other and waged a price war. However, prices below USD 700 CFR seem to have now faded out.

The state of overproduction has still continued but sellers seem to be unable to cut their prices any more from the point of view of costs. It is said that sellers have already reached a limit to reduce their prices, companies begin to select withdrawal from the market. For this reason, the cheap prices of the USD 650 level disappeared, and shakeout of companies is likely to have started.

Even if mills had done a fierce competition on NO electrical sheets and recorded deficits, they could have covered such deficits by sale of other steel sheets and coils in the past. However as the price level of other sheets/coils like hot rolled steel coils and coated steel sheets is also low, the managerial environment seems to be for them not to be able to cover deficits of NO electrical sheets by compensation of other sheets and coils.

Under the circumstances, prices of NO electrical sheets do not drop amid excess supply, and on the contrary an increase in prices is difficult. The Japanese mills are supplying them mainly to the Japanese customers in overseas. Such case that negotiations were ended for shipment of this quarter appeared, and there were no price decreases and there were some companies to accept even a slight increase in prices. However, it is very far from reaching USD 800 CFR.