UK based MEPS said that the relentless upward movement in EU prices continues and customers are obliged to accept the new higher third quarter values demanded by local producers. MEPS added that “Prices of imported strip into Europe are still increasing this month, although less material is entering the region. There is relatively little steel from China due to the pending anti dumping investigations. Output from domestic mills for July September deliveries appears to be restricted.”

MEPS said that “Demand from end users in Germany has slowed slightly because they are not sure they can pass on their increased costs to their customers in a weakening economic climate. Although service centers are making good profits at present, they are keeping stocks down. Third country imports are available, albeit not always at attractive prices. Buyers are not keen to place orders for deliveries so far ahead when they feel current prices are probably at their peak for this cycle.”

MEPS said that “In the French market, inventories are quite low and not expected to recover in the near term because of a lack of overseas availability and restricted supply from domestic sources. Prices continue to increase for third quarter deliveries. Sales are only average, although demand from the auto sector has improved.”

MEPS added that “Strip mill prices have registered further sizeable rises in Italy this month and the trend is expected to continue to the end of the summer as import volumes drop away. As hot rolled coil prices escalate, they are pushing the rest of the flat products with them. Stocks are depleted at present because customers are reluctant to risk losing money if the price trend goes into reverse.”

MEPS said that “Corus has stated that it will lift basis prices for quarterly contracts in mainland Europe by EUR 130 per tonne from July 1st 2008 but so far, no official announcements have been issued concerning the local market. Sales at home are lackluster. However, customers have fewer options on supply because of a lack of third country imports and much smaller quantities than usual on offer from other EU suppliers. There has been no speculative purchasing ahead of the period three price advances. Negotiations are underway and it is clear that prices will rise markedly. Our tabled figures are the results of early deals and values could go higher as more business is concluded.”

MEPS added that “Steel consumption is still quite good in Belgium, although the domestic appliance sector is starting to show signs of weakness. Market players are concerned that the second half of the year could prove to be more difficult as prices may have almost reached a level that the market can no longer support. Stocks at the service centers are on the low side of normal due to tight credit, delayed deliveries and mill restrictions on supply. Distributors are able to pass the higher mill prices to their customers. End users are keeping inventories to a minimum. Third country material is absent and the European mills are reported to be selling large tonnages overseas.

MEPS also said that “In Spain, general demand is stable. However, the auto sector is still reducing order volumes and construction activity is particularly weak as ongoing projects are completed and new ones postponed or cancelled. Availability from European mills is constrained, with smaller clients suffering the most.”

According to industry association statement, China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters was deeply unhappy with and strongly opposed to US affirmative determination on the anti dumping and anti subsidy probe into steel pipes imported from China.

The US Commerce Department has determined on May 30th 2008 that Chinese producers and exporters sold standard pipe in the United States at 69.20% to 85.55% less than normal value, and received net countervailable subsidies ranging from 29.57% to 615.92%.

CCCMC claimed that the use of anti subsidy measures infringes US rules and the tradition of not adopting anti subsidy measures against non market economies which has been practiced since 1984.

The statement said the frequent requests for anti subsidy probes into Chinese exports made by US industries are not conducive to the normal development of the bilateral trade relations. It said US ruled that China distorted the domestic prices of hot-rolled sheet steel and subsidies were received by all pipe producers, ranging from state-owned to private makers.

CCCMC said it runs counter to the World Trade Organization Agreement on Subsidies and Countervailing Measures. It said that US Department of Commerce’s false calculation of the subsidies and consequent double taxation, greatly hurt the interests of Chinese industry and is not acceptable to China.

CCCMC strongly urged the US to treat and solve Sino-US steel trade problems fairly proceeding from the long term interest of bilateral trade and economic cooperation.

It is reported that Mr Tom Albanese CEO of Rio Tinto Ltd sees value in the freight premium charged on iron ore contracts.

Mr Albanese said that “The freight differential, which is something I have talked about since July last year, was of sufficient importance and value for Rio Tinto and its shareholders, that it is worth negotiating for, and that’s exactly what we are doing.

Mr Albanese said that “Negotiations on this year’s benchmark are continuing. We feel it very important for the benchmark system to evolve to take into consideration the principles of value that includes freight differentials.”

Mr Albanese said there was a value associated with Australian iron ore being closer to the Asian market than Brazilian iron ore. He said that “Australian ores are closer to the Asian market than Brazilian ores and we think there is a value associated with that and that has been part of our discussions.”

Mr Albanese said that “Now, we are getting late in the game on these negotiations and we need to move them forward with some urgency.”

Yesterday, provincial government of Guangdong held a meeting for the outdated iron and steel capacities to be stopped, and the capacities to be closed due to the relocation of Guangzhou Iron and Steel. The Development and Reform Commission and Environment Protection Office of Guangdong Province signed Letter of Responsibility for Iron and Steel Capacities Closure due to the Relocation of Guanggang, and signed with concerned local governments Letter of Responsibility for Stopping and Washing Out Outdated Iron and Steel Capacities, including Shaoguan, Heyuan, Meizhou, Huizhou, Shanwei, and so on. The concerned capacities to be closed in the “11th Five-year” amounted to more than 10 million tons.
It is revealed on the meeting that the government will give the companies who loss capacities some economic compensation under condition, and the detail is planning.