China's Baosteel Co Ltd is active in promoting its tinplate exports to various destinations such as Southeast Asia, Latin America, and the Middle East, according to information made available in Tokyo. Prices on offer so far are viewed as a level of US$900/ton FOB. But it is likely that Baosteel will reduce offer prices in an attempt to win firm contracts of tinplate exports, believe Japan's steel industry sources (Thu 13 Nov).

Baosteel applied a flat domestic price of tinplate in October shipments. The company has reduced the asking price of tinplate by Yn700/ton (US$103) for November shipments. Then, Baosteel is determined to keep the asking price unchanged for December shipments. But there are signs that various domestic users are marking time on new purchases of tinplate while putting pressure on Baosteel to lower what the company charges for tinplate. As a result, it is understood that Baosteel is having a tough time promoting its domestic sales of tinplate.

Besides, Sino-Japanese tinplate joint ventures in China face local users' strong demand for a price reduction of tinplate. But those joint ventures remain noncommittal to any price reduction in what the sell after they have executed a certain price increase each for October-December shipments. Meanwhile, there are signs of local customers buying tinplate for immediate requirements alone. As a result, what the joint ventures produce is said to have fallen to around 50% of a normal level until now.

With limited domestic orders for tinplate, Baosteel is described as responding with its struggle to promote tinplate exports to Southeast Asia and elsewhere such as Latin America and the Middle East. In Southeast Asia, Baosteel is said to be positive in selling into Indonesia and Thailand. As a result, it is understood that Japan's integrated steelmakers face a tough environment for their tinplate exports to Indonesia.

Baosteel is eager to negotiate its tinplate exports to Latin America as well, according to market sources. In this connection, there are signs of falling prices in tinplate supply deals for Latin America, where there are offers of tinplate exports by European steelmakers too. Chinese and European offer prices to Latin America differ much from what Japanese integrated steelmakers recently offered there. The Japanese offers stood at a level of US$1,300-1,400/ton FOB for October-December shipments.

Prices of constructive steel products such as wire rods and shapes are tumbling globally due to a fall of demand in the world's economic downturn. By comparison, tinplate usually features its status free of a major price reduction because the material bears closely on foodstuff. In fact, tinplate demand holds steady in Asian nations such as Thailand where domestic tinplate production is said to be insufficient to meet a local supply shortage of tinplate. In the current environment for the tinplate business, though, Baosteel has taken the plunge and reduced its tinplate price, which has led to the collapse of a tinplate price system in Asia, market observers point out.

The current situation in China precludes enlarged sales of tinplate even if tinplate prices are held down. As a result, it remains to be seen what domestic price Baosteel will quote in its tinplate sales for shipments in the January-March quarter of 2009, new price terms that are expected to become clear in the latter half of next week. – TEX Report