ArcelorMittal's
$400 price hike on offer in 2009 US tinplate deals
ArcelorMittal USA has offered a price increase of $400/ton in its tinplate
sales negotiations with various can manufacturers in the USA for shipments in 2009, it was learned in Tokyo Wednesday. As a result, other US tinplate producers are expected to follow suit for their domestic shipments in 2009.
The US steel industry has been operating at less than 50% of capacity since the
beginning of December. Its steel capacity utilization was 49% last week. In the
USA, domestic demand for steel products is way down in consuming sectors
ranging from autos to building materials. As a result, local transaction prices
of steel products face a steep fall as a whole.
Under the existing circumstances in the USA, it is a matter of attention that
ArcelorMittal USA is trying to win a considerable price increase in its
tinplate contract negotiations for shipments in 2009. The price increase is
believed to have stemmed from the company's policy to meet a surge in the costs
of raw materials.
In the USA, most of the domestic tinplate shipments are usually negotiated under annual supply
contracts, for which negotiations on contract renewals start from the
October-December quarter of each year. For shipments in 2008, the contract
renewal negotiations started in the October-December quarter of 2007 and a
price increase of $100/ton was agreed after the beginning of 2008. At the time,
though, the price terms settled were devoid of a pass-along to meet a surge in
raw materials costs because there were no forecasts that prices of raw
materials such as iron <http://metalsplace.com/news/iron-steel/>
ore, coking coal and tin <http://metalsplace.com/news/tin/>
would soar to an abnormal level.
In the USA, consumer spending is considerably declining in the repercussions of the financial
crisis, a situation that applies to foodstuffs as well. But canned foodstuffs
are an exception. Among general households, more of them are opting to avoid
purchasing perishable foods while stocking up on canned nonperishables in large
amounts for thrifty life. Accordingly, tinplate demand for canned foods is
described as favorable.
A major
price increase for tinplate shipments in the USA will exert a favorable
influence on tinplate exports out of Japan, Europe and the USA to Latin America, market sources forecast. As far as US steelmakers are concerned, they are
expected to exercise moderation in reducing what they charge for tinplate
exports to Latin America.
Meanwhile,
Japan's integrated steelmakers find it difficult to respond with active tinplate
exports to the USA even if local transaction prices of tinplate have advanced
considerably in 2009. For the main bottleneck, Japanese tinplate imports into
the USA are subject to the existing 95% antidumping duty. Back in June 1999,
the US steel industry filed an antidumping case against tinplate imports from Japan. Then, the US International Trade Commission admitted injury of the imports to US
steel mills in its final determination, under which the 95% AD duty was imposed
on the imports. The AD duty came under a sunset review in 2006, which led to
its continuance. – TEX Report
ArcelorMittal US eying price hike for tinplate sales
Tex reported that ArcelorMittal USA
has offered a price increase of USD 400 a tonne in its tinplate sales
negotiations with various can manufacturers in the USA for shipments in 2009.
As a result, other US tinplate producers are expected to follow suit for their
domestic shipments in 2009. It may be noted that the US steel industry has been
operating at less than 50% of capacity since the beginning of December. Its
steel capacity utilization was 49% last week. In the USA, domestic demand for
steel products is way down in consuming sectors ranging from autos to building
materials. As a result, local transaction prices of steel products face a steep
fall as a whole. Under the existing circumstances in the USA, it is a matter of attention that ArcelorMittal USA is trying to win a considerable
price increase in its tinplate contract negotiations for shipments in 2009. The
price increase is believed to have stemmed from the company's policy to meet a
surge in the costs of raw materials. Meanwhile, Japan's integrated steelmakers
find it difficult to respond with active tinplate exports to the USA even if local transaction prices of tinplate have advanced considerably in 2009. For
the main bottleneck, Japanese tinplate imports into the USA are subject to the existing 95% antidumping duty. Back in June 1999, the US steel
industry filed an antidumping case against tinplate imports from Japan. Then, the US International Trade Commission admitted injury of the imports to US
steel mills in its final determination, under which the 95% AD duty was imposed
on the imports. The AD duty came under a sunset review in 2006, which led to
its continuance. (Sourced from Tex Reports)