As all of us konws, scrap metal market in China has been in dullness these days. Why it is been like this?

As a overseas supports, do you still have interest in China market? ■

As all of us konws, scrap metal market in China has been in dullness these days. Why it is been like this?

As a overseas supports, do you still have interest in China market? ■

At present, domestic steel industry is in difficulties. The monthly export of steel products could reach several hundred thousand tons in the first half year, which dropped drastically since September, when the export was only 40,000 tons, while the export situation in October was more severe.

Latest figures from China Customs showed that domestic steel export was 6.67 million tons in September, down 1.01 million tons from August. Although the export decline in September was far lower than the previous expectation, all held that the export in October and November will fall sharply.

Analysts of steel industry pointed out that the export data in September was carrying out the contract of July and August, when the international economic situation was not the worst and demands from Europe and America had no obvious shrink. In the fourth quarter this year, steel export from China may face more tough situations. ■

At present, domestic steel industry is in difficulties. The monthly export of steel products could reach several hundred thousand tons in the first half year, which dropped drastically since September, when the export was only 40,000 tons, while the export situation in October was more severe.

Latest figures from China Customs showed that domestic steel export was 6.67 million tons in September, down 1.01 million tons from August. Although the export decline in September was far lower than the previous expectation, all held that the export in October and November will fall sharply.

Analysts of steel industry pointed out that the export data in September was carrying out the contract of July and August, when the international economic situation was not the worst and demands from Europe and America had no obvious shrink. In the fourth quarter this year, steel export from China may face more tough situations. ■

At the eighth China International Steel and Raw Material Conference, suppliers and buyers reached a unique agreement that market situation sharply changed and the future was full of uncertainties.

Recently, Shan Shanghua, the general secretary of China Iron and Steel Association (CISA) predicted global steel production capacity growth would come to a halt next year; iron ore supply-demand relation change would arrive in advance.

At present, suppliers and buyers are communicating for the new round iron ore price negotiation, CISA hopes to seek the unity of long-term contract price and spot price and eliminate the price difference between Asia and Europe.

For Further Details or Clarification, please contact us:

Contact: Michael Zheng

E-mail: info@chinametalbiz.com

Website: www.chinametalbiz.com ■

At the eighth China International Steel and Raw Material Conference, suppliers and buyers reached a unique agreement that market situation sharply changed and the future was full of uncertainties.

Recently, Shan Shanghua, the general secretary of China Iron and Steel Association (CISA) predicted global steel production capacity growth would come to a halt next year; iron ore supply-demand relation change would arrive in advance.

At present, suppliers and buyers are communicating for the new round iron ore price negotiation, CISA hopes to seek the unity of long-term contract price and spot price and eliminate the price difference between Asia and Europe.

For Further Details or Clarification, please contact us:

Contact: Michael Zheng

E-mail: info@chinametalbiz.com

Website: www.chinametalbiz.com ■

In November this year, the financial storm caused by US credit crisis kept expanding, which shook the global economic structure. The impacts on real economy intensified. Data released by US Department of Labor showed that the CPI index in US fell 1pc in Oct. from the previous month, the largest decline within recent 61 months. The report from US Department of Commerce revealed that new houses being built plunged by 4.5pc in Oct., the lowest since 1947, which indicate the serious economic slump in US.

The monthly investigation from European Commission showed that the integrated prosperity index in Euro zone dropped from 80.0 in Oct. to 74.9 in Nov., the lowest since Aug., 1993 and far below than the prediction of 78.0 from economists.

Nations like Japan, South Korea and India, etc. fell into the same economic recessions. The latest report from IMF pointed that global economic fell into downturn, and the export increase from Asia shrank drastically. Meanwhile, the economic growth will slow down sharply. Therefore, the expectation of GDP growth in 2008 and 2009 on Asia was reduced to 6pc and 4.9pc respectively from chinametalbiz.com

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In November this year, the financial storm caused by US credit crisis kept expanding, which shook the global economic structure. The impacts on real economy intensified. Data released by US Department of Labor showed that the CPI index in US fell 1pc in Oct. from the previous month, the largest decline within recent 61 months. The report from US Department of Commerce revealed that new houses being built plunged by 4.5pc in Oct., the lowest since 1947, which indicate the serious economic slump in US.

The monthly investigation from European Commission showed that the integrated prosperity index in Euro zone dropped from 80.0 in Oct. to 74.9 in Nov., the lowest since Aug., 1993 and far below than the prediction of 78.0 from economists.

Nations like Japan, South Korea and India, etc. fell into the same economic recessions. The latest report from IMF pointed that global economic fell into downturn, and the export increase from Asia shrank drastically. Meanwhile, the economic growth will slow down sharply. Therefore, the expectation of GDP growth in 2008 and 2009 on Asia was reduced to 6pc and 4.9pc respectively from chinametalbiz.com

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Qi Xiangdong, the executive vice general secretary of China Iron & Steel Association (CISA) expressed on Dec.6 in Shangshai that since the third quarter of this year, China steel output notably tumbled, prices extensively plunged, more and more enterprises got losses, the whole industry faced severe challenge, and nearly 60pc large and medium steelmills operated in the red, in addition, next year, China steel production should pay attention to the pushing effects produced by macro economy and the direct and indirect export level of steel products, and actively tackle the challenges in accordance with market change.

Steel industry presented an unprecedented rapid-rebound situation since Sept.

Qi expressed that since entering New Age, with the accelerating of global economic recovery and domestic industrialization process, Chinese steel production kept high growth for seven consecutive years, crude steel can averagely grow around 20pc per year from 2001 to 2007, however, since September this year, steel industry presented an unprecedented rapid-rebound situation, while the lowest monthly output was 14.8mln tons lower than the highest point.

The latest statistics data provided by Qi Xiangdong showed that, when compared to the same period last year, profit of domestic 71 large and medium steelmills slumped 0.93pc in the first ten months this year, among which, that respectively sank 19.44pc and 72.9pc in August and September, in addition, 42 of 71 steelmills made a loss of 7.77bln yuan in October.

According to the analysis of Qi Xiangdong, the substantial reasons that lead to steelmills’ negative profit were the poor demand, sharply descendent steel price and high-level cost, what’s more, domestic steelmills’ sales profit rate was 5.58pc from January to October, but dropped to -3.23pc only in October, appeared a significant fallback situation for more visit: chinametalbiz.com

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info@chinametalbiz.com ■

Qi Xiangdong, the executive vice general secretary of China Iron & Steel Association (CISA) expressed on Dec.6 in Shangshai that since the third quarter of this year, China steel output notably tumbled, prices extensively plunged, more and more enterprises got losses, the whole industry faced severe challenge, and nearly 60pc large and medium steelmills operated in the red, in addition, next year, China steel production should pay attention to the pushing effects produced by macro economy and the direct and indirect export level of steel products, and actively tackle the challenges in accordance with market change.

Steel industry presented an unprecedented rapid-rebound situation since Sept.

Qi expressed that since entering New Age, with the accelerating of global economic recovery and domestic industrialization process, Chinese steel production kept high growth for seven consecutive years, crude steel can averagely grow around 20pc per year from 2001 to 2007, however, since September this year, steel industry presented an unprecedented rapid-rebound situation, while the lowest monthly output was 14.8mln tons lower than the highest point.

The latest statistics data provided by Qi Xiangdong showed that, when compared to the same period last year, profit of domestic 71 large and medium steelmills slumped 0.93pc in the first ten months this year, among which, that respectively sank 19.44pc and 72.9pc in August and September, in addition, 42 of 71 steelmills made a loss of 7.77bln yuan in October.

According to the analysis of Qi Xiangdong, the substantial reasons that lead to steelmills’ negative profit were the poor demand, sharply descendent steel price and high-level cost, what’s more, domestic steelmills’ sales profit rate was 5.58pc from January to October, but dropped to -3.23pc only in October, appeared a significant fallback situation for more visit: chinametalbiz.com

www.chinametalbiz.com

info@chinametalbiz.com ■

The global iron ore negotiation price-fixing system began in 1981 and it has been for 28 years till now. The benchmark price-fixing system was held in the fourth quarter every year, in which the world’s major iron ore suppliers made negotiations with other major customers to decide the next year’s iron ore FOB price, and if any one supplier reached the iron ore contract with steelmills, the others should accept the negotiation result.

Principles of traditional iron ore benchmark pricing system

. The price reached in the first round of negotiation will be accepted by the rest rounds of negotiation and became the standard price-fixing for the whole year, in which, buyers will not purchase from other sellers with higher price in the future negotiation and sellers will not sell to the buyers with cheaper price too.

. The same product variety only has one price rising standard, that is to say, they only set the price rising for the various varieties of products, not considering the different price rising for the different quality of the same variety. Every variety only has one price rising standard in the five- year straight negotiation from 2003 to 2007, with the exception of Vale’s BF pellet ores.

. Iron ore price was set by FOB price, not including ocean freight and other charges, for more visit: chinametalbiz.com ■

The global iron ore negotiation price-fixing system began in 1981 and it has been for 28 years till now. The benchmark price-fixing system was held in the fourth quarter every year, in which the world’s major iron ore suppliers made negotiations with other major customers to decide the next year’s iron ore FOB price, and if any one supplier reached the iron ore contract with steelmills, the others should accept the negotiation result.

Principles of traditional iron ore benchmark pricing system

. The price reached in the first round of negotiation will be accepted by the rest rounds of negotiation and became the standard price-fixing for the whole year, in which, buyers will not purchase from other sellers with higher price in the future negotiation and sellers will not sell to the buyers with cheaper price too.

. The same product variety only has one price rising standard, that is to say, they only set the price rising for the various varieties of products, not considering the different price rising for the different quality of the same variety. Every variety only has one price rising standard in the five- year straight negotiation from 2003 to 2007, with the exception of Vale’s BF pellet ores.

. Iron ore price was set by FOB price, not including ocean freight and other charges, for more visit: chinametalbiz.com ■

According to the investigation and analysis of operators and insiders, construction steel market of 2009 shows an air of expectancy, stabilization and slight fluctuation will be the essential characteristics.

This year, domestic construction steel market suffered shaken changes, prices continuously ascended and descended. In the first half of the year, the whole market warmed up in series, prices sharply soared, thereinto, prices of 6.5mm high-speed wire rod and 20mm deformed bar once respectively inclined to 5,850 yuan per ton and 5,535 yuan per ton, correspondingly boomed 1,350 yuan per to and 1,050 yuan per ton when compared to the end of 2007. However, when entering the second half of the year, the good situation suddenly turned, prices significantly descended and presented an irrigational sharp drop situation, while some ordinary deformed bar price plunged to 3,000 yuan per ton in October, showing a rare phenomenon. ■

According to the investigation and analysis of operators and insiders, construction steel market of 2009 shows an air of expectancy, stabilization and slight fluctuation will be the essential characteristics.

This year, domestic construction steel market suffered shaken changes, prices continuously ascended and descended. In the first half of the year, the whole market warmed up in series, prices sharply soared, thereinto, prices of 6.5mm high-speed wire rod and 20mm deformed bar once respectively inclined to 5,850 yuan per ton and 5,535 yuan per ton, correspondingly boomed 1,350 yuan per to and 1,050 yuan per ton when compared to the end of 2007. However, when entering the second half of the year, the good situation suddenly turned, prices significantly descended and presented an irrigational sharp drop situation, while some ordinary deformed bar price plunged to 3,000 yuan per ton in October, showing a rare phenomenon. ■

“Steel prices had plunged to the level of 1994. Winter is coming, indicating that spring is not too far away.” Qi Xiangdong, vice general secretary of China Iron and Steel Association (CISA) expressed.

Data from CISA shows that in Jan.-Nov., China produced 462.96 million tons of steel products, up 2.6pc over the same period last year, while the growth dropped back 14.1pc year-on-year. In Nov., China produced 35.9 million tons of steel products, down 4.97 million tons and 12.4pc from the same period last year.

Steel production showed unprecedented rapid decline in Sept.. In June this year, the daily steel production scored the historical high of 1.5648 million tons, equivalent to the annual production of 573 million tons. The daily steel production dropped to 1.3205 million tons in Sept., equivalent to the annual production of 482 million tons, while the average output fell to 1.1581 million tons in Oct., equivalent to that of 423 million tons a year. In Nov., the daily output plunged to 1.07 million tons, equivalent to that of 393 million tons per year. For further info visit chinametalbiz.com ■

“Steel prices had plunged to the level of 1994. Winter is coming, indicating that spring is not too far away.” Qi Xiangdong, vice general secretary of China Iron and Steel Association (CISA) expressed.

Data from CISA shows that in Jan.-Nov., China produced 462.96 million tons of steel products, up 2.6pc over the same period last year, while the growth dropped back 14.1pc year-on-year. In Nov., China produced 35.9 million tons of steel products, down 4.97 million tons and 12.4pc from the same period last year.

Steel production showed unprecedented rapid decline in Sept.. In June this year, the daily steel production scored the historical high of 1.5648 million tons, equivalent to the annual production of 573 million tons. The daily steel production dropped to 1.3205 million tons in Sept., equivalent to the annual production of 482 million tons, while the average output fell to 1.1581 million tons in Oct., equivalent to that of 423 million tons a year. In Nov., the daily output plunged to 1.07 million tons, equivalent to that of 393 million tons per year. For further info visit chinametalbiz.com ■

Annual iron ore negotiation is still in deadlock and failure to get to agreement after experiencing several rounds of negotiations. Although Australian mining companies repeatedly objects the requirement of 40pc price reduction proposed by China side, Australia’s domestic Medias and analysis institutions all think Chinese enterprises will gain the upper hand in the new round of iron ore negotiation.

According to Australia Media, China will be the country, which will stabilize the energy demand and master mineral products market in the year of 2009.

An official from Deacon expressed that China owns enormous funds and capacity, while other countries do not have the enviable status.

A person in charge of Australia Energy Industry Organization said that, as the only prospective buyer, China has enormous influences.

One Analyst from Goldman Sachs expressed that the metallic mineral products demand from the world will shrink, and quantity of products’ prices decline is unavoidable, therefore, Australia’s resources industries will face tighter situation.

Hereby, many insiders from Australian mineral industries thought, China will twist the prices. Vaughan, the cooperation partner of BLAKEDAWSON expressed that at present, China is in a stronger bargaining position in international iron ore market versus the previous, and the current pattern changes due to the demand decline.

Some experts from industrial member predicted that, the contract would generally plunge around 30pc at the beginning of iron ore negotiation, and China side takes the control.

Excluding driving down iron ore price, Chinese enterprises also began to utilize fund superiority to acquire high-quality mineral assets. Since the end of last year, many Australian mineral companies have signed financing agreements with Chinese enterprises. For further info visit chinametalbiz.com ■

Annual iron ore negotiation is still in deadlock and failure to get to agreement after experiencing several rounds of negotiations. Although Australian mining companies repeatedly objects the requirement of 40pc price reduction proposed by China side, Australia’s domestic Medias and analysis institutions all think Chinese enterprises will gain the upper hand in the new round of iron ore negotiation.

According to Australia Media, China will be the country, which will stabilize the energy demand and master mineral products market in the year of 2009.

An official from Deacon expressed that China owns enormous funds and capacity, while other countries do not have the enviable status.

A person in charge of Australia Energy Industry Organization said that, as the only prospective buyer, China has enormous influences.

One Analyst from Goldman Sachs expressed that the metallic mineral products demand from the world will shrink, and quantity of products’ prices decline is unavoidable, therefore, Australia’s resources industries will face tighter situation.

Hereby, many insiders from Australian mineral industries thought, China will twist the prices. Vaughan, the cooperation partner of BLAKEDAWSON expressed that at present, China is in a stronger bargaining position in international iron ore market versus the previous, and the current pattern changes due to the demand decline.

Some experts from industrial member predicted that, the contract would generally plunge around 30pc at the beginning of iron ore negotiation, and China side takes the control.

Excluding driving down iron ore price, Chinese enterprises also began to utilize fund superiority to acquire high-quality mineral assets. Since the end of last year, many Australian mineral companies have signed financing agreements with Chinese enterprises. For further info visit chinametalbiz.com ■

Jan.20 MetalBiz—The annual iron ore negotiation has started, but is much later than that of the negotiations in the previous years, which usually held in the fourth quarter of the former year. This is mainly because several rules of the traditional price fixing system have been broken in the iron ore negotiation of 2008. Therefore, many discussions should be held on this year’s price fixing system.

As for the price fixing mechanism, an issue of great concern is the controversy over index pricing, that is, Australian iron ore giants BHP Billiton tried to promote iron ore index pricing mechanism in the world, while China Iron and Steel Industry Association (CISA) said that China will not accept that. In that case, why China can not accept the iron ore index pricing? For further info visit chinametalbiz.com ■

Jan.20 MetalBiz—The annual iron ore negotiation has started, but is much later than that of the negotiations in the previous years, which usually held in the fourth quarter of the former year. This is mainly because several rules of the traditional price fixing system have been broken in the iron ore negotiation of 2008. Therefore, many discussions should be held on this year’s price fixing system.

As for the price fixing mechanism, an issue of great concern is the controversy over index pricing, that is, Australian iron ore giants BHP Billiton tried to promote iron ore index pricing mechanism in the world, while China Iron and Steel Industry Association (CISA) said that China will not accept that. In that case, why China can not accept the iron ore index pricing? For further info visit chinametalbiz.com ■

Although insiders generally thought the buyers’ market of iron ore would come sooner or later, but they didn’t predict that the result had approached in such a prompt and severe speed due to U.S. subprime mortgage crisis.

Affected by the ongoing financial crisis, steel production radically declines, as well as the large-scale concentrated release of iron ore investment previously, the buyers’ market of iron ore has come in the third quarter of 2008.

According to the statistics data from EconStats, iron ore price in international market had rapidly decreased from the peak of $183 per ton in July, 2008 to $71 per ton in November. However, analysts thought latter iron ore demand would continue to slump, iron ore price would keep sinking, and the poor situation would last for 3-5 years.

Buyers’ market of iron ore coming

On Jan.15, on the symposium of 2009 iron ore import held by China Iron & Steel Association (CISA), Wu Xichun, the consultant of CISA pointed out that global iron ore was bound to oversupply in 2009, as bulk commodity’s prices general sank, global iron ore demand sharply declined, and iron ore and steel products demand from China continued to plunge. For further info visit chinametalbiz.com ■

Although insiders generally thought the buyers’ market of iron ore would come sooner or later, but they didn’t predict that the result had approached in such a prompt and severe speed due to U.S. subprime mortgage crisis.

Affected by the ongoing financial crisis, steel production radically declines, as well as the large-scale concentrated release of iron ore investment previously, the buyers’ market of iron ore has come in the third quarter of 2008.

According to the statistics data from EconStats, iron ore price in international market had rapidly decreased from the peak of $183 per ton in July, 2008 to $71 per ton in November. However, analysts thought latter iron ore demand would continue to slump, iron ore price would keep sinking, and the poor situation would last for 3-5 years.

Buyers’ market of iron ore coming

On Jan.15, on the symposium of 2009 iron ore import held by China Iron & Steel Association (CISA), Wu Xichun, the consultant of CISA pointed out that global iron ore was bound to oversupply in 2009, as bulk commodity’s prices general sank, global iron ore demand sharply declined, and iron ore and steel products demand from China continued to plunge. For further info visit chinametalbiz.com ■

EXW prices of nonferrous metals products fell 24.6pc in Jan. from the same period last year, according to National Bureau of Statistics (NBS).

Insiders expressed that this was mainly affected by global economic recession. Under a series of favorable policies and consumption stimulation, EXW prices of nonferrous metals will rebound to some extent over Jan., but will also have large decline year-on-year.

On Feb.10, NBS issued that in Jan., EXW prices of industrial products fell 3.3pc from the previous year, while EXW prices of nonferrous metals dropped 24.6pc.

ProductAluminum Copper leadzinc

Price up (m-o-m%)-19.8-41.1-36.7-43.0

According to SMMI in Shanghai, price index of nonferrous metals was around 1,400 points in Jan., down 49pc year-on-year. For further info visit chinametalbiz.com ■

EXW prices of nonferrous metals products fell 24.6pc in Jan. from the same period last year, according to National Bureau of Statistics (NBS).

Insiders expressed that this was mainly affected by global economic recession. Under a series of favorable policies and consumption stimulation, EXW prices of nonferrous metals will rebound to some extent over Jan., but will also have large decline year-on-year.

On Feb.10, NBS issued that in Jan., EXW prices of industrial products fell 3.3pc from the previous year, while EXW prices of nonferrous metals dropped 24.6pc.

ProductAluminum Copper leadzinc

Price up (m-o-m%)-19.8-41.1-36.7-43.0

According to SMMI in Shanghai, price index of nonferrous metals was around 1,400 points in Jan., down 49pc year-on-year. For further info visit chinametalbiz.com ■

Feb.18 MetalBiz--Under the drive of economic stimulus package in January, domestic steel market presented a recovery situation, market confidence further restored, steel production and demand inclined to some extent, and steel products prices slightly rebounded, thus made the declining range of international steel market slowed down.

Domestic steel prices faintly rebounded.

At the end of January, the composite price index of domestic steel products stood at 107.69, up 4.39 month-on-month, but down 18.62pc year-on-year.

The composite price index table of domestic steel products

Price indexEnd-Jan., 2009End-Dec., 2008Growth m-o-m (%)Up&Down

(%)The same period last yearGrowth y-o-y (%)Up&Down

(%)

Composite 107.69103.34.394.25126.31-18.62-14.74

Long products111.96108.543.423.1513.79-18.83-14.40

Plate products106.50101.694.814.73127.74-21.24-16.63

In addition, varieties products prices all boosted to some extent, especially hot-rolled coil and plate and cold-rolled sheet. For further info visit chinametalbiz.com ■

Feb.18 MetalBiz--Under the drive of economic stimulus package in January, domestic steel market presented a recovery situation, market confidence further restored, steel production and demand inclined to some extent, and steel products prices slightly rebounded, thus made the declining range of international steel market slowed down.

Domestic steel prices faintly rebounded.

At the end of January, the composite price index of domestic steel products stood at 107.69, up 4.39 month-on-month, but down 18.62pc year-on-year.

The composite price index table of domestic steel products

Price indexEnd-Jan., 2009End-Dec., 2008Growth m-o-m (%)Up&Down

(%)The same period last yearGrowth y-o-y (%)Up&Down

(%)

Composite 107.69103.34.394.25126.31-18.62-14.74

Long products111.96108.543.423.1513.79-18.83-14.40

Plate products106.50101.694.814.73127.74-21.24-16.63

In addition, varieties products prices all boosted to some extent, especially hot-rolled coil and plate and cold-rolled sheet. For further info visit chinametalbiz.com ■

China's steel market was not yet in sight of recovery as shrinking exports and overcapacity continued, officials from the China Iron and Steel Association (CISA) said.

Luo Bingsheng, CISA's executive deputy director, said at a conference on Monday that the rise in steel prices from December to February was not a sign of recovery. The country's steel market would remain subdued this year because of shrinking demand and huge capacity, he added.

CISA vice secretary general Qi Xiangdong put the rise in prices down to an increase in stockpiling.

"The financial crisis and the domestic economic slowdown resulted in contraction in both overseas and domestic markets", Luo said, noting China, the world largest producer and consumer, was facing many uncertainties.

The lingering financial crisis dragged the world economy into recession.

Many steel-consuming industries were seriously battered, especially construction, automobile and shipbuilding, which caused a steep drop in steel demand and therefore eroded China's steel exports, the Beijing Lange Steel Information Research Center said.

According to the General Administration of Customs, China exported 1.91 million tons of rolled steel last month, a decline of 2.22 million tons, or 53.8 percent, from the same month of 2008. The steel exports were also 1.26 million tons, or 39.7 percent, below the December level.

The prospect is not upbeat as the World Steel Association forecasted the global demand for steel would fall more than 10 percent in 2009 year on year. The Republic of Korea (ROK) and the U.S., the main importers of China's steel, would post declines of 9.5 percent and 10 percent in 2009, respectively. Japan's demand for the first quarter would slide 31.6 percent.

He added the RMB’s appreciation also helped weaken the competitiveness of China's steel products. Additionally, there emerged growing concerns over trade protectionism worldwide.

The global economic turmoil also hurt China's economy, driving it down to a 9 percent growth for the whole year in 2008. For further info visit chinametalbiz.com ■

China's steel market was not yet in sight of recovery as shrinking exports and overcapacity continued, officials from the China Iron and Steel Association (CISA) said.

Luo Bingsheng, CISA's executive deputy director, said at a conference on Monday that the rise in steel prices from December to February was not a sign of recovery. The country's steel market would remain subdued this year because of shrinking demand and huge capacity, he added.

CISA vice secretary general Qi Xiangdong put the rise in prices down to an increase in stockpiling.

"The financial crisis and the domestic economic slowdown resulted in contraction in both overseas and domestic markets", Luo said, noting China, the world largest producer and consumer, was facing many uncertainties.

The lingering financial crisis dragged the world economy into recession.

Many steel-consuming industries were seriously battered, especially construction, automobile and shipbuilding, which caused a steep drop in steel demand and therefore eroded China's steel exports, the Beijing Lange Steel Information Research Center said.

According to the General Administration of Customs, China exported 1.91 million tons of rolled steel last month, a decline of 2.22 million tons, or 53.8 percent, from the same month of 2008. The steel exports were also 1.26 million tons, or 39.7 percent, below the December level.

The prospect is not upbeat as the World Steel Association forecasted the global demand for steel would fall more than 10 percent in 2009 year on year. The Republic of Korea (ROK) and the U.S., the main importers of China's steel, would post declines of 9.5 percent and 10 percent in 2009, respectively. Japan's demand for the first quarter would slide 31.6 percent.

He added the RMB’s appreciation also helped weaken the competitiveness of China's steel products. Additionally, there emerged growing concerns over trade protectionism worldwide.

The global economic turmoil also hurt China's economy, driving it down to a 9 percent growth for the whole year in 2008. For further info visit chinametalbiz.com ■

MetalBiz—Since Feb. this year, steel prices plunged after continuous slight increases in earlier period. The successive price rising has not led to real industrial recovery, instead, some large steel enterprises fell into difficulties of demand decline again. Analysts held domestic steel industry will remain in slump in Mar. before the international iron ore negotiation confirmed.

Short-term price recovery has not brought enterprises out of deficit

Last year, since the broke of the financial crisis, domestic steel industry prices plunged rapidly due to continuous demand decline. Profit losses intensified in most enterprises. However, prices of some products rebounded since Jan..

It is said that the situation of Jan. was much better than that of last Q4. In Jan., Shandong produced 3.91 million tons of iron, 3.54 million tons of crude steel and 4.16 million tons of steel products, down 7.95pc, 1.71pc and 7.61pc year-on-year respectively, and up 22pc, 20.6pc and 9.5pc month-on-month separately. The price of steel products continued to increase slightly on the basis of last Dec., while most prices have recovered to 3,800-4,200 Yuan per ton.

Although steel prices increased on month, they still plunged 15-30pc year-on-year. It is predicted that steel industry of Shandong province is still in profit losses. In Jan., Jigang lost 415 million Yuan profit, down 1.15pc month-on-month and 635 million Yuan from the same period last year, while Laigang lost 360 million Yuan profit, down 380 million Yuan month-on-month and 770 million Yuan year-on-year.

Domestic steel demand weakened since Feb., and prices showed downward trend again. There was hardly order from international market, while domestic orders fell drastically compared with Jan… For further info visit chinametalbiz.com ■

MetalBiz—Since Feb. this year, steel prices plunged after continuous slight increases in earlier period. The successive price rising has not led to real industrial recovery, instead, some large steel enterprises fell into difficulties of demand decline again. Analysts held domestic steel industry will remain in slump in Mar. before the international iron ore negotiation confirmed.

Short-term price recovery has not brought enterprises out of deficit

Last year, since the broke of the financial crisis, domestic steel industry prices plunged rapidly due to continuous demand decline. Profit losses intensified in most enterprises. However, prices of some products rebounded since Jan..

It is said that the situation of Jan. was much better than that of last Q4. In Jan., Shandong produced 3.91 million tons of iron, 3.54 million tons of crude steel and 4.16 million tons of steel products, down 7.95pc, 1.71pc and 7.61pc year-on-year respectively, and up 22pc, 20.6pc and 9.5pc month-on-month separately. The price of steel products continued to increase slightly on the basis of last Dec., while most prices have recovered to 3,800-4,200 Yuan per ton.

Although steel prices increased on month, they still plunged 15-30pc year-on-year. It is predicted that steel industry of Shandong province is still in profit losses. In Jan., Jigang lost 415 million Yuan profit, down 1.15pc month-on-month and 635 million Yuan from the same period last year, while Laigang lost 360 million Yuan profit, down 380 million Yuan month-on-month and 770 million Yuan year-on-year.

Domestic steel demand weakened since Feb., and prices showed downward trend again. There was hardly order from international market, while domestic orders fell drastically compared with Jan… For further info visit chinametalbiz.com ■

China taking new strategies in iron ore negotiation

MetalBiz-- “I think the three major iron ore suppliers will not delay again, because we will negotiate with suppliers, moreover, those who first reach an agreement with China side will receive the largest purchase quantity.” one Chinese authority imparted on Mar.16 when speaking of the negotiating strategies that China will take next step.

It was known to us the global steel production and demand for iron slumped this year, although China’s demand would decline, the demand was still high, and the three major suppliers reduced output at different levels, so China would negotiate with the three major suppliers with the principle of first come and first served, according to him.

It is learned that in the Imported Iron Ore Working Committee held in Tangshan in January, China Iron & Steel Association (CISA) done a demand statistics to domestic most steelmills this year, which also covered the traders at the same time.

Analysts pointed out that it may be the preparation for asking for price. “In this condition, suppliers should positively response, and it is necessary to consider making concessions first or after.” the above-mentioned person said.

Zhang Xiaogang, Ansteel’ general manager expressed during an interview that the iron ore giants such as Companhia Vale do Rio Doce (CVRD) and Rio Tinto could reduce the price by 40-50pc.

"When steel prices decline, prices of raw materials are bound to decrease, and the Indian spot prices reduction is the evidence", he said.

In addition, after suffering a rebound, domestic iron ore spot market and sea freight began a new round plunge since last February.

IanChristmas, the secretary-general of World Steel Association (WSA) also said: "Prices of steel products have dropped 50pc, so that of iron ore should slip 50pc.”

Owing to the downturn of iron and steel market, Rio Tinto and BHP Billiton are still waiting for the market restoration so as to the substantial price negotiation, while Brazil Vale said clearly that they would not set the price and would hold watch-and-see attitude towards the two Australian companies’ negotiation result. … For further info visit chinametalbiz.com ■

China taking new strategies in iron ore negotiation

MetalBiz-- “I think the three major iron ore suppliers will not delay again, because we will negotiate with suppliers, moreover, those who first reach an agreement with China side will receive the largest purchase quantity.” one Chinese authority imparted on Mar.16 when speaking of the negotiating strategies that China will take next step.

It was known to us the global steel production and demand for iron slumped this year, although China’s demand would decline, the demand was still high, and the three major suppliers reduced output at different levels, so China would negotiate with the three major suppliers with the principle of first come and first served, according to him.

It is learned that in the Imported Iron Ore Working Committee held in Tangshan in January, China Iron & Steel Association (CISA) done a demand statistics to domestic most steelmills this year, which also covered the traders at the same time.

Analysts pointed out that it may be the preparation for asking for price. “In this condition, suppliers should positively response, and it is necessary to consider making concessions first or after.” the above-mentioned person said.

Zhang Xiaogang, Ansteel’ general manager expressed during an interview that the iron ore giants such as Companhia Vale do Rio Doce (CVRD) and Rio Tinto could reduce the price by 40-50pc.

"When steel prices decline, prices of raw materials are bound to decrease, and the Indian spot prices reduction is the evidence", he said.

In addition, after suffering a rebound, domestic iron ore spot market and sea freight began a new round plunge since last February.

IanChristmas, the secretary-general of World Steel Association (WSA) also said: "Prices of steel products have dropped 50pc, so that of iron ore should slip 50pc.”

Owing to the downturn of iron and steel market, Rio Tinto and BHP Billiton are still waiting for the market restoration so as to the substantial price negotiation, while Brazil Vale said clearly that they would not set the price and would hold watch-and-see attitude towards the two Australian companies’ negotiation result. … For further info visit chinametalbiz.com ■

Mar.23 MetalBiz--"The steel industry’s industrial adjustment and revitalization plan" (the following referred to as "Plan") was formally lay down on Friday, which emphasized on planning to control the volume ,eliminating backward products, reorganizing corporation, technological innovation and optimizing the layout, and strived to form super-large iron and steel enterprises such as Baosteel and Ansteel whose production capacity was more than 50 million tons all over the nation till 2011 by accelerating the reorganization of the domestic steel mills, as well as a number of large-scale ones whose capacity was 10-30 mln tons. At the same time, “Strategic Plan” requested the Ministry of Finance to take the lead, Uniting State Administration of Taxation, Ministry of Commerce and other departments, to complete the import and export tax rates adjustment of partial steel products in Mar.

Promoting export

“Plan” put "maintaining domestic market stability, and improving the export environment" in the first place among eight aspects of work in the current and later period of time in the steel industry. And it also put forward policies of expanding exports, while "Iron and Steel Industry Development Policy" was issued in July, 2005; and there was almost no mention of the problem on steel exports. Therefore, “Strategic Plan” reflected the country put great importance on promotion of steel exports.

Since the spread of financial crisis in H2 of 2008, China steel exports dropped significantly. Our total of steel exports in 2008 was 59,230,000 tons, a reduction of 3,420,000 tons year-on-year, down 5.7 pc, while entering in 2009, Chinese steel exports situation was further deteriorated. China's exports of crude steel was 3,690,000 tons, sank 4,090,000 tons on an annual basis, down 51.8 pc in January and February 2009.

Therefore, "Strategic Plan" suggested we should earnestly implement the measures of improving partial steel products export rebate tax rate, and appropriately improve export rebate tax rate of partial steel products with high technical content and high added value. At the same time, we should improve the export credit insurance policy and support for iron and steel enterprises setting up overseas marketing network so as to ensure the stability of the export share of high-end products.

According to the journalist, the Ministry of Finance would take the lead, uniting the relevant departments to finish the adjustment of partial import and export products rate in March. … For further info visit chinametalbiz.com

For further information please visit www.chinametalbiz.com

E-mail: info@chinametalbiz.com ■

Mar.23 MetalBiz--"The steel industry’s industrial adjustment and revitalization plan" (the following referred to as "Plan") was formally lay down on Friday, which emphasized on planning to control the volume ,eliminating backward products, reorganizing corporation, technological innovation and optimizing the layout, and strived to form super-large iron and steel enterprises such as Baosteel and Ansteel whose production capacity was more than 50 million tons all over the nation till 2011 by accelerating the reorganization of the domestic steel mills, as well as a number of large-scale ones whose capacity was 10-30 mln tons. At the same time, “Strategic Plan” requested the Ministry of Finance to take the lead, Uniting State Administration of Taxation, Ministry of Commerce and other departments, to complete the import and export tax rates adjustment of partial steel products in Mar.

Promoting export

“Plan” put "maintaining domestic market stability, and improving the export environment" in the first place among eight aspects of work in the current and later period of time in the steel industry. And it also put forward policies of expanding exports, while "Iron and Steel Industry Development Policy" was issued in July, 2005; and there was almost no mention of the problem on steel exports. Therefore, “Strategic Plan” reflected the country put great importance on promotion of steel exports.

Since the spread of financial crisis in H2 of 2008, China steel exports dropped significantly. Our total of steel exports in 2008 was 59,230,000 tons, a reduction of 3,420,000 tons year-on-year, down 5.7 pc, while entering in 2009, Chinese steel exports situation was further deteriorated. China's exports of crude steel was 3,690,000 tons, sank 4,090,000 tons on an annual basis, down 51.8 pc in January and February 2009.

Therefore, "Strategic Plan" suggested we should earnestly implement the measures of improving partial steel products export rebate tax rate, and appropriately improve export rebate tax rate of partial steel products with high technical content and high added value. At the same time, we should improve the export credit insurance policy and support for iron and steel enterprises setting up overseas marketing network so as to ensure the stability of the export share of high-end products.

According to the journalist, the Ministry of Finance would take the lead, uniting the relevant departments to finish the adjustment of partial import and export products rate in March. … For further info visit chinametalbiz.com

For further information please visit www.chinametalbiz.com

E-mail: info@chinametalbiz.com ■

On April 13, the Ministry of Commerce deputy director of foreign trade Liang Shuhe said in the international market seminar that the domestic steel price had fallen the level of 1994, so the material price especially iron ore long-term contract price must be reduced substantially.

Liang pointed that domestic import iron ore spot price significantly slumped while the imports inclined, and it is possible that the phenomenon would be continuous. The global steel production dropped 23% in Jan. to March this year and the price would keep the continuous downward trend. While, China the first two months production growth did not play a role in the needs-to end and the inventory in March climbed to 10mln tons, which did not made the iron ore price keep stable. He suggested that China Iron and Steel Association (CISA) and China Minmetals Chamber of Commerce should focus on the agent system of iron ore imports and standardize the trade order.

China Minmetals Chamber of Commerce president Xuxu said it is the fact that this year steel production declined, so is iron ore market demand. At present, crude steel reduction in European Union, North America and Asia reached 45%, 50% and 20% respectively.

. … For further info visit chinametalbiz.com ■

On April 13, the Ministry of Commerce deputy director of foreign trade Liang Shuhe said in the international market seminar that the domestic steel price had fallen the level of 1994, so the material price especially iron ore long-term contract price must be reduced substantially.

Liang pointed that domestic import iron ore spot price significantly slumped while the imports inclined, and it is possible that the phenomenon would be continuous. The global steel production dropped 23% in Jan. to March this year and the price would keep the continuous downward trend. While, China the first two months production growth did not play a role in the needs-to end and the inventory in March climbed to 10mln tons, which did not made the iron ore price keep stable. He suggested that China Iron and Steel Association (CISA) and China Minmetals Chamber of Commerce should focus on the agent system of iron ore imports and standardize the trade order.

China Minmetals Chamber of Commerce president Xuxu said it is the fact that this year steel production declined, so is iron ore market demand. At present, crude steel reduction in European Union, North America and Asia reached 45%, 50% and 20% respectively.

. … For further info visit chinametalbiz.com ■

The international iron ore negotiation has not determined, together with the sluggish market, the iron ore pricing system presented the more complicated situation. On April 21, one of the three major mining companies Vale issued a statement that the iron ore contract should take the provisional discount to implement in 2009, that is, 80% payment paid in cash and another 20% will be paid at the end of the price negotiation of 2009.

It is learned that the Australian mining company has given a discount to sale the long-term contract iron ore to China on spot market, which is the first time that three major mines sold iron ore to China by means of discount.

Vale said it will take the benchmark price of 2008 as the provisional price, when the contract implements. Then it will adjust the price according to the results when the benchmark price negotiation of 2009 finished. As is customary, Vale and Asian steel enterprises complete the benchmark price negotiation on April 1 every year, but the negotiation has not had a result at moment. In the past, the suppliers and buyers settles the price with the long-term contract price of last year, when the new annual price had not determined, however, mines made a concession because of the downturn market.

Vale presient of China area Zhu Kai said that it will not first release the price this year, “In the past, we are the engine and now intend to be the back.” Zhu also revealed the company will increase 25% reduction this year, at the same time, it will enhance the sales in China. He believes that Vale products are more competitive in China, because the large-scale mining companies have more cost advantage and 100mln tons iron ore supply is expected to replace by more competitive manufacturers.

It is understood that Vale Q1 iron ore shipments to Europe declined

. … For further info visit chinametalbiz.com ■

The international iron ore negotiation has not determined, together with the sluggish market, the iron ore pricing system presented the more complicated situation. On April 21, one of the three major mining companies Vale issued a statement that the iron ore contract should take the provisional discount to implement in 2009, that is, 80% payment paid in cash and another 20% will be paid at the end of the price negotiation of 2009.

It is learned that the Australian mining company has given a discount to sale the long-term contract iron ore to China on spot market, which is the first time that three major mines sold iron ore to China by means of discount.

Vale said it will take the benchmark price of 2008 as the provisional price, when the contract implements. Then it will adjust the price according to the results when the benchmark price negotiation of 2009 finished. As is customary, Vale and Asian steel enterprises complete the benchmark price negotiation on April 1 every year, but the negotiation has not had a result at moment. In the past, the suppliers and buyers settles the price with the long-term contract price of last year, when the new annual price had not determined, however, mines made a concession because of the downturn market.

Vale presient of China area Zhu Kai said that it will not first release the price this year, “In the past, we are the engine and now intend to be the back.” Zhu also revealed the company will increase 25% reduction this year, at the same time, it will enhance the sales in China. He believes that Vale products are more competitive in China, because the large-scale mining companies have more cost advantage and 100mln tons iron ore supply is expected to replace by more competitive manufacturers.

It is understood that Vale Q1 iron ore shipments to Europe declined

. … For further info visit chinametalbiz.com ■

As a result of the global economic downturn caused by declining demand, the United States, a leading steel producer, said on the 21st, as an important iron and steel production of iron ore raw material prices should be reduced by more than half.

"Iron ore prices have tripled over the past three years, demand has been lower than the current three years ago, therefore, the increase in costs should be reasonable disappeared." AK Steel, CEO of the United States Tuesday with Wall Street JamesWainscott Analysis division of the telephone conference that "the situation is completely different, we should see iron ore prices in 2009 more than 50% reduction." Prior to this, according to China Iron and Steel News Network reported that POSCO is responsible for the procurement of raw materials, vice Wing Tai, president of the whole (KwonYoung-tae) on April 10 announced that mine operators are seeking a 20% decline, which is expected to have a considerable gap. Very depressed because the steel city, iron ore prices to the level of 2008/09 at least 50% decline.

One of the three major mining company CVRD (Vale) issued a statement Monday that the 2009 iron ore contract discount will be taken to the provisional implementation of such a flexible manner, that is, 80% of the price paid in cash and another 20% of the purchase price will be negotiations in 2009 after the end of the price to pay. CVRD said the contract will be implemented in 2008 as a temporary price of the benchmark prices, in 2009 after the end of the benchmark price negotiations will be adjusted based on the results. ■

As a result of the global economic downturn caused by declining demand, the United States, a leading steel producer, said on the 21st, as an important iron and steel production of iron ore raw material prices should be reduced by more than half.

"Iron ore prices have tripled over the past three years, demand has been lower than the current three years ago, therefore, the increase in costs should be reasonable disappeared." AK Steel, CEO of the United States Tuesday with Wall Street JamesWainscott Analysis division of the telephone conference that "the situation is completely different, we should see iron ore prices in 2009 more than 50% reduction." Prior to this, according to China Iron and Steel News Network reported that POSCO is responsible for the procurement of raw materials, vice Wing Tai, president of the whole (KwonYoung-tae) on April 10 announced that mine operators are seeking a 20% decline, which is expected to have a considerable gap. Very depressed because the steel city, iron ore prices to the level of 2008/09 at least 50% decline.

One of the three major mining company CVRD (Vale) issued a statement Monday that the 2009 iron ore contract discount will be taken to the provisional implementation of such a flexible manner, that is, 80% of the price paid in cash and another 20% of the purchase price will be negotiations in 2009 after the end of the price to pay. CVRD said the contract will be implemented in 2008 as a temporary price of the benchmark prices, in 2009 after the end of the benchmark price negotiations will be adjusted based on the results. ■