The steel rebar futures price fell to RMB 4,200 per tonne, less than a seven-month high of RMB 4,252 hit on February 23 on concerns about weaker demand and pressure from regulators to cut prices.
According to China’s National Development and Reform Commission, measures have been put in place to monitor price increases caused by speculative activity and punish traders who spread false product information to push up prices.
Meanwhile, the administration set a 5% growth target for this year during the session of the National People’s Congress, dimming hopes for a more ambitious plan and opening the door for additional stimulus for infrastructure and construction.
As Tangshan, a major center for steelmaking, was forced to prolong its production halt due to severe contamination, signs of limited supply continued. Mills have been forced to bid at higher levels as a result of limited shipments due to bad weather in the world’s top two iron ore exporters, Australia and Brazil, raising the cost of scarce raw materials.
Global aluminum producers propose Q2 premiums between $125 to 145/T
According to five people directly involved in the quarterly pricing discussions, international aluminum producers have offered Japanese customers premiums of $125-$145 per tonne for April-June shipments of primary metals, 45%-71% more than This trimester.
The proposals indicate a perception among producers that demand from automakers is about to increase if buyers accept them.
Japan, Asia’s biggest importer of primary metals, sets the standard for the area with the premiums it agrees to pay for shipments over the LME cash price each quarter. Quarterly price talks between Japanese buyers such as rolling mills and trading companies and international suppliers of aluminum ingots such as Rio Tinto Ltd. and South32 Ltd. began last week and are expected to last until the end of the month.
Premium steel and aluminum prices fall in Japan
Japanese buyers agreed to a rate of $85-$86 per ton (PREM-ALUM-JP) when securing shipments for the January-March quarter, marking a 13-14% decrease from the previous quarter.
As premiums in the US, Europe and other parts of Asia rose “due to good demand and limited supply” and anticipations of a recovery in auto manufacturing, a source at a major supplier said the company was considering raising premiums.
But most consumers lacked faith. A source at a Japanese rolling mill said that because domestic demand was still low, his company was “stunned by the rapid jump.”
At the end of January, aluminum inventories at Japan’s three main ports (AL-STK-JPPRT) rose 2.8% to 392,500t compared to the previous month. Marubeni Corp 8002 reported that the numbers were 34% higher than the same period last year. This trend reflected lackluster demand. Due to the nature of the conversations, the sources declined to be named.
