AK Steel (NYSE:AKS) said Monday they're going to increase the price of their carbon steel products by $40 a ton going forward.
Demand for carbon steel products is the impetus behind the price increase, along with increasing margins because of higher costs.
The new prices will start immediately, and will be added to any new orders for carbon steel products, said the steelmaker.
This refers to up to date spot market base prices, which the $40 a ton will be added to.
Showing posts with label Steelmakers. Show all posts
Showing posts with label Steelmakers. Show all posts
Tuesday, August 3, 2010
Wednesday, June 9, 2010
BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RTP) Offering Monthly Iron Ore Prices to Chinese
BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP) are reportedly now offering steelmakers in China the option of monthly iron ore prices, in addition to the recent change to quarterly pricing.
"We will probably get a small proportion of contracted iron ore under the monthly pricing scheme, while the majority remains under the quarterly pricing scheme from Australian suppliers," said a senior official at Shagang, the fifth-largest Chinese steelmaker.
Chinese domestic steel demand is expected to grow at 15.8 percent in 2010, according to Macquarie, but drop to 8 percent in 2011, and 7.5 percent by 2012.
But now with China attacking the inflation related to its property market, it's hard to tell if those figures will remain the same, with some believing it will cause the sector to decline below former estimates.
"We will probably get a small proportion of contracted iron ore under the monthly pricing scheme, while the majority remains under the quarterly pricing scheme from Australian suppliers," said a senior official at Shagang, the fifth-largest Chinese steelmaker.
Chinese domestic steel demand is expected to grow at 15.8 percent in 2010, according to Macquarie, but drop to 8 percent in 2011, and 7.5 percent by 2012.
But now with China attacking the inflation related to its property market, it's hard to tell if those figures will remain the same, with some believing it will cause the sector to decline below former estimates.
Monday, June 7, 2010
BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RTP) Raising Iron Ore Prices
Contrary to other commodity prices, it seems iron ore remains a hot commodity, and BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP) are going to raise prices again for the main ingredient to make steel, this time by close to 23 percent from the last quarter.
This price increase was made in relationship to Japanese steelmakers, although will apply to other buyers as well.
It is thought that Vale (NYSE:VALE) will follow in the footsteps of their peers and raise iron ore prices as well.
Prices after the latest increase per ton for iron ore will be at about $147 a ton, far above the 2009 fiscal prices, which were 140 percent less than today's prices.
Steelmakers are poised to add those extra costs onto their products, essentially passing the higher prices to consumers.
This does make one wonder if this is sustainable, as other commodity demand has fallen, and if demand has fallen for other metals used to make products, it's hard to see how iron ore and steel are able to stand on their own, as it points to demand drying up and people hanging onto their money.
I don't think the general public has processed what they're up against in the emerging or ongoing economic challenges in Europe, China and the U.S., and this could backfire on BHP, Rio and Vale if demand starts to implode on them and they're stuck with high prices with nowhere to go but down.
This price increase was made in relationship to Japanese steelmakers, although will apply to other buyers as well.
It is thought that Vale (NYSE:VALE) will follow in the footsteps of their peers and raise iron ore prices as well.
Prices after the latest increase per ton for iron ore will be at about $147 a ton, far above the 2009 fiscal prices, which were 140 percent less than today's prices.
Steelmakers are poised to add those extra costs onto their products, essentially passing the higher prices to consumers.
This does make one wonder if this is sustainable, as other commodity demand has fallen, and if demand has fallen for other metals used to make products, it's hard to see how iron ore and steel are able to stand on their own, as it points to demand drying up and people hanging onto their money.
I don't think the general public has processed what they're up against in the emerging or ongoing economic challenges in Europe, China and the U.S., and this could backfire on BHP, Rio and Vale if demand starts to implode on them and they're stuck with high prices with nowhere to go but down.
Friday, May 7, 2010
Nucor (NYSE:NUE) Acquiring Companies, Own Shares
Nucor (NYSE:NUE) seems to be getting on surer footing in a tough steel market, as residential and non-residential construction markets continue to be tough.
Expansion through acquisition and acquiring shares in their own company has been much of the focus recently, as they prepare for what they hope is an upswing in the steel market.
Nucor has increased production at their steel mills from last year, and is looking for an even better quarter than the the first quarter.
Along with competitor Gerdau Ameristeel (NYSE:GNA) (TSE:GNA), they've also commited to keeping prices for wide-flange steel beams where they're at now, as they want to continue the industry on a more even keel, after several years of extreme challenges.
Expansion through acquisition and acquiring shares in their own company has been much of the focus recently, as they prepare for what they hope is an upswing in the steel market.
Nucor has increased production at their steel mills from last year, and is looking for an even better quarter than the the first quarter.
Along with competitor Gerdau Ameristeel (NYSE:GNA) (TSE:GNA), they've also commited to keeping prices for wide-flange steel beams where they're at now, as they want to continue the industry on a more even keel, after several years of extreme challenges.
Wednesday, May 5, 2010
Vale (NYSE:VALE) Profits Up 18 Percent
Vale SA (SAO:Vale5) (NYSE:VALE) had earnings in the first quarter increase by 18 percent as demand for iron ore surged from steelmakers.
Revenue for the quarter grew from $5.42 billion last year to $6.85 billion in this quarter, while profits rose to $1.6 billion, or 30 cents a share, from $1.36 billion, or 26 cents a share the same quarter last year.
The gains are directly related to increasing iron ore demand and the inability to supply all of it in the world, which allows for higher prices and better profits.
Most demand is coming from China, and iron ore needs will grow at an estimated 10 percent there in 2010. Approximately 57 percent of iron ore and pellet shipments of Vale go to China.
Vale's major competitors are Rio Tinto Group (ASX:RIO) (LON:RIO) and BHP Billiton Ltd. (ASX:BHP) (NYSE:BHP).
Revenue for the quarter grew from $5.42 billion last year to $6.85 billion in this quarter, while profits rose to $1.6 billion, or 30 cents a share, from $1.36 billion, or 26 cents a share the same quarter last year.
The gains are directly related to increasing iron ore demand and the inability to supply all of it in the world, which allows for higher prices and better profits.
Most demand is coming from China, and iron ore needs will grow at an estimated 10 percent there in 2010. Approximately 57 percent of iron ore and pellet shipments of Vale go to China.
Vale's major competitors are Rio Tinto Group (ASX:RIO) (LON:RIO) and BHP Billiton Ltd. (ASX:BHP) (NYSE:BHP).
Saturday, April 10, 2010
Coal Prices Up On Massey (NYSE:MEE) Mine Explosion
Coal prices soar after Massey mine explosion
The explosion at a Massey Energy (NYSE:MEE) mine has caused the price of metallurgical coal to increase as a tight coal market will continue to struggle with the loss of coal supply.
Now that the final four miners' bodies have been found, bringing the total loss of life to 29, it becomes the worst mining accident since 1970.
It'll take months to find the cause behind the explosions, and that will drag on the coal market for some time.
Metallurgical coal is a higher quality product, and demand is high for it, especially in Asia.
Estimates for the Upper Big Branch mine was to ship about 1.6 million tons of metallurgical coal in 2010, about 3 percent of all production in the U.S., based on numbers from 2009.
Even with increased production at other mines, Massey said it's doubtful they're be able to replace what the Upper Big Branch mine would have produced.
With spot prices already increasing by 22 percent, steelmakers will be under pressure, determined by whether or not they'll have to eat the higher prices and have their margins fall, or they are able to pass them on to their customers.
The explosion at a Massey Energy (NYSE:MEE) mine has caused the price of metallurgical coal to increase as a tight coal market will continue to struggle with the loss of coal supply.
Now that the final four miners' bodies have been found, bringing the total loss of life to 29, it becomes the worst mining accident since 1970.
It'll take months to find the cause behind the explosions, and that will drag on the coal market for some time.
Metallurgical coal is a higher quality product, and demand is high for it, especially in Asia.
Estimates for the Upper Big Branch mine was to ship about 1.6 million tons of metallurgical coal in 2010, about 3 percent of all production in the U.S., based on numbers from 2009.
Even with increased production at other mines, Massey said it's doubtful they're be able to replace what the Upper Big Branch mine would have produced.
With spot prices already increasing by 22 percent, steelmakers will be under pressure, determined by whether or not they'll have to eat the higher prices and have their margins fall, or they are able to pass them on to their customers.
Wednesday, April 7, 2010
VALE (NYSE:VALE) Wants Investigation of EU Steelmakers
Vale SA Wants EU Steelmakers Investigated
Vale SA (NYSE:VALE) has made a request to the European Commission to investigate whether or not the steelmakers in the EU colluded when entering into negotiations over iron ore prices.
In the letter sent to the commission, Vale asked them to examine whether there had been “communications and coordination” between the steelmakers during the process.
Eurofer, which represents European steelmakers, responsed via director general Gordon Moffat, saying, “This is an absurd attempt by Vale to divert attention from legitimate concerns expressed by consumers. I’m sure the commission will see it as such.”
The recent system of annual pricing for coking coal and iron ore was dropped in favor of a quarterly pricing contract.
Vale SA (NYSE:VALE) has made a request to the European Commission to investigate whether or not the steelmakers in the EU colluded when entering into negotiations over iron ore prices.
In the letter sent to the commission, Vale asked them to examine whether there had been “communications and coordination” between the steelmakers during the process.
Eurofer, which represents European steelmakers, responsed via director general Gordon Moffat, saying, “This is an absurd attempt by Vale to divert attention from legitimate concerns expressed by consumers. I’m sure the commission will see it as such.”
The recent system of annual pricing for coking coal and iron ore was dropped in favor of a quarterly pricing contract.
Tuesday, March 30, 2010
BHP Billiton (ASE:BHP) Migrates to Short-term Iron Ore Contracts
BHP Billiton Quarterly now using iron ore sales contracts
It was no surprise to hear that BHP Billiton (ASE:BHP) has moved most of its Asian customers to short-term contract for its iron ore from the previous annual contract, which they have been fighting to move away from for years.
A BHP spokeswoman said about the actions, "We will have different pricing solutions in place for different customers. Pricing will be determined by the landed market price in China."
The actual price of the contracts wasn't revealed, as the legalities of contract confidentiality were cited.
Asian steel mills in particular have resisted these changes, as they preferred the stability included with the annual contracts previously used. But they will probably change their minds once they get used to the idea and prices reflect the current market conditions more accurately.
It was no surprise to hear that BHP Billiton (ASE:BHP) has moved most of its Asian customers to short-term contract for its iron ore from the previous annual contract, which they have been fighting to move away from for years.
A BHP spokeswoman said about the actions, "We will have different pricing solutions in place for different customers. Pricing will be determined by the landed market price in China."
The actual price of the contracts wasn't revealed, as the legalities of contract confidentiality were cited.
Asian steel mills in particular have resisted these changes, as they preferred the stability included with the annual contracts previously used. But they will probably change their minds once they get used to the idea and prices reflect the current market conditions more accurately.
Monday, March 29, 2010
Teck Resources (NYSE:TCK) Increasing Coal Production by 50 Percent in 5 Years
Teck Resources Coal Production
Teck Resources (NYSE:TCK) has stated it wants to increase its coal production by 50 percent within five years as demand for coking coal skyrockets.
This is probably a realistic goal if it's predicated upon China's hunger for coking coal, as they can't get enough of it to feed their needs, even after they increased coal imports by 500 percent last year.
In 2010 expectations are China will import over 30 million tons of coal this year, as their domestic supply can't keep up with their demand from steel mills.
Steel production is projected to continue to increase in China for some time, and that will guarantee demand for coking coal will increase with it.
Teck Resources will increase revenue and profits with it if they can meet their coal production goals.
Teck Resources (NYSE:TCK) has stated it wants to increase its coal production by 50 percent within five years as demand for coking coal skyrockets.
This is probably a realistic goal if it's predicated upon China's hunger for coking coal, as they can't get enough of it to feed their needs, even after they increased coal imports by 500 percent last year.
In 2010 expectations are China will import over 30 million tons of coal this year, as their domestic supply can't keep up with their demand from steel mills.
Steel production is projected to continue to increase in China for some time, and that will guarantee demand for coking coal will increase with it.
Teck Resources will increase revenue and profits with it if they can meet their coal production goals.
Wednesday, March 24, 2010
U.S. Steel (NYSE:N), Nucor (NYSE:NUE), AK Steel (NYSE:AKS) and Steel Dynamics (NASDAQ:STLD) Rise On Improved Production
World Steel Association Report
Major steelmakers made big moves as data released Tuesday revealed demand for steel products has resulted in increased production and capacity rates at companies like U.S. Steel (NYSE:N), Nucor (NYSE:NUE), AK Steel (NYSE:AKS) and Steel Dynamics (NASDAQ:STLD).
Data from the World Steel Association showed operating rates at steel plants were their highest since September 2008, while worldwide steel production increased 24.2 percent from February 2009.
Output for crude steel surged by 51.3 percent to just under 6 million tons in February as well.
Utilization is expected to average far above 2009 levels, which were at 62.8 percent in the fourth quarter of 2009, increasing to an average between 70 percent to 75 percent, said the report.
Predictably the news sent stocks of steelmaker surging.
Major steelmakers made big moves as data released Tuesday revealed demand for steel products has resulted in increased production and capacity rates at companies like U.S. Steel (NYSE:N), Nucor (NYSE:NUE), AK Steel (NYSE:AKS) and Steel Dynamics (NASDAQ:STLD).
Data from the World Steel Association showed operating rates at steel plants were their highest since September 2008, while worldwide steel production increased 24.2 percent from February 2009.
Output for crude steel surged by 51.3 percent to just under 6 million tons in February as well.
Utilization is expected to average far above 2009 levels, which were at 62.8 percent in the fourth quarter of 2009, increasing to an average between 70 percent to 75 percent, said the report.
Predictably the news sent stocks of steelmaker surging.
Thursday, March 18, 2010
BHP Billiton (LON:BLT) Bullish on Finalizing Rio Tinto (LON:RIO) Joint Venture
BHP Billiton Bullish on Rio Tinto Joint Venture
BHP Billiton (LON:BLT) says it's bullish on being able to finalize the joint venture with Rio Tinto (LON:RIO) for the iron ore production business.
Iron ore demand has increased this year, along with the prices, as steel companies battle for access to iron ore to build their products.
Rio would have a larger stake so BHP would pay them about $5.8 billion to level the stakes in the venture.
Concerns the Australian government will increase taxes to an extraordinary 40 percent is weighing on the deal, as well as other miners, who believe it could do a lot harm to the industry and economic growth, which would be stifled by the high taxes.
Other major hurdles include the deal being approved by the European Union, which somewhat opposed the attempt by BHP to acquire Rio Tinto a couple of years ago.
BHP Billiton (LON:BLT) says it's bullish on being able to finalize the joint venture with Rio Tinto (LON:RIO) for the iron ore production business.
Iron ore demand has increased this year, along with the prices, as steel companies battle for access to iron ore to build their products.
Rio would have a larger stake so BHP would pay them about $5.8 billion to level the stakes in the venture.
Concerns the Australian government will increase taxes to an extraordinary 40 percent is weighing on the deal, as well as other miners, who believe it could do a lot harm to the industry and economic growth, which would be stifled by the high taxes.
Other major hurdles include the deal being approved by the European Union, which somewhat opposed the attempt by BHP to acquire Rio Tinto a couple of years ago.
Saturday, March 6, 2010
China's Steel Industry Future
China's Steel Industry
China is looking to a steel industry future which features a lot less competition and what sounds like consolidation.
Disatisfaction with the performance of their domestic steel industry revealed in comments by the China Iron and Steel Association, which blamed price challenges on the privately-owned mills as the source of their problem.
Evidently they feel the smaller companies have caused profit margins to fall by expanding their capacity, causing too much steel to be offered in the market.
It sounds like the government-run steel industry companies are going to attempt to push the smaller companies out of the business so they can more effectively control what's going on.
Quicker response to accepting iron ore prices from the smaller companies this year threw a wrench in China's attempt to push down contract prices, evidently inferiating the Chinese, although they're not outwardly showing that.
It looks like China will attempt to put the smaller steel mills out of business so they can control the industry more centrally. I think it will backfire on them, but time will tell.
China's Steel Industry
China is looking to a steel industry future which features a lot less competition and what sounds like consolidation.
Disatisfaction with the performance of their domestic steel industry revealed in comments by the China Iron and Steel Association, which blamed price challenges on the privately-owned mills as the source of their problem.
Evidently they feel the smaller companies have caused profit margins to fall by expanding their capacity, causing too much steel to be offered in the market.
It sounds like the government-run steel industry companies are going to attempt to push the smaller companies out of the business so they can more effectively control what's going on.
Quicker response to accepting iron ore prices from the smaller companies this year threw a wrench in China's attempt to push down contract prices, evidently inferiating the Chinese, although they're not outwardly showing that.
It looks like China will attempt to put the smaller steel mills out of business so they can control the industry more centrally. I think it will backfire on them, but time will tell.
China's Steel Industry
Tuesday, February 23, 2010
BHP Billiton (ASX:BHP) Japan Coal Prices
BHP Billiton (ASX:BHP) (NYSE:BHP) Japan Coal Prices
A proposal from BHP Billiton (ASX:BHP) to Japanese steelmakers to increase the price of coking coal provided by the company by 55 percent was greeted with luke warm response from the Japanese, to say the least.
BHP has held its coking coal prices down over the last couple of years, probably the reason it through out such hig percentage increase in prices to test the Japanese response. It also could be an attempt to secure higher prices than they hoped for by presenting such a large increase in the first place.
The Japanese have reportedly rejected the prices asked for, and BHP will now start to negotiate in earnest concerning the prices. This was probably BHP telling the Japanese they'll have to pay a lot more this year for the coking coal.
BHP Billiton (ASX:BHP) (NYSE:BHP) Japan Coal Prices
A proposal from BHP Billiton (ASX:BHP) to Japanese steelmakers to increase the price of coking coal provided by the company by 55 percent was greeted with luke warm response from the Japanese, to say the least.
BHP has held its coking coal prices down over the last couple of years, probably the reason it through out such hig percentage increase in prices to test the Japanese response. It also could be an attempt to secure higher prices than they hoped for by presenting such a large increase in the first place.
The Japanese have reportedly rejected the prices asked for, and BHP will now start to negotiate in earnest concerning the prices. This was probably BHP telling the Japanese they'll have to pay a lot more this year for the coking coal.
BHP Billiton (ASX:BHP) (NYSE:BHP) Japan Coal Prices
Monday, February 15, 2010
BHP (NYSE:BBL), Vale (NYSE: VALE), Iron Ore Contracts
BHP Billiton, Vale, Rio Tinto Iron Ore Prices
According to BHP Billiton (NYSE:BBL) CEO Marius Kloppers, “The market price (for iron ore) is what the benchmark price is supposed to be.” Kloppers added that the benchmark today is about twice what it was last year. Vale (NYSE: VALE) concurs, wanting to see iron ore prices at the annual level reflect spot market levels.
The contentiousness of negotiations between China and BHP Billiton, Vale and Rio Tinto have continued from last year, with the producers expected to want up to 50 percent in annual increases, trying to move away from the benchmark system of pricing.
So far there has been some temporary agreements between some Chinese steelmakers and BHP for a 40 percent in contracted iron ore prices.
With steel prices not rising as quickly as iron ore, it's thought that could decrease the amount the producers are looking for, although the demand and supply factor is again in play this year, which could even temper that scenario.
One way or the other, China as a strong demand for iron ore, and if they want it they're going to have to be willing to pay for it.
Kloppers also made an interesting insight in that he believes that steel production in China will continue to rise in demand over the next 20 years, seeming to signify a bull market in iron ore and steel for some time to come.
“We did a bottom-up analysis, how many buildings, what is the steel
intensity and so on and we think that this trend is going to go on for
the 20 years that we’ve forecast,” he said.
BHP Billiton, Vale, Rio Tinto Iron Ore Prices
According to BHP Billiton (NYSE:BBL) CEO Marius Kloppers, “The market price (for iron ore) is what the benchmark price is supposed to be.” Kloppers added that the benchmark today is about twice what it was last year. Vale (NYSE: VALE) concurs, wanting to see iron ore prices at the annual level reflect spot market levels.
The contentiousness of negotiations between China and BHP Billiton, Vale and Rio Tinto have continued from last year, with the producers expected to want up to 50 percent in annual increases, trying to move away from the benchmark system of pricing.
So far there has been some temporary agreements between some Chinese steelmakers and BHP for a 40 percent in contracted iron ore prices.
With steel prices not rising as quickly as iron ore, it's thought that could decrease the amount the producers are looking for, although the demand and supply factor is again in play this year, which could even temper that scenario.
One way or the other, China as a strong demand for iron ore, and if they want it they're going to have to be willing to pay for it.
Kloppers also made an interesting insight in that he believes that steel production in China will continue to rise in demand over the next 20 years, seeming to signify a bull market in iron ore and steel for some time to come.
“We did a bottom-up analysis, how many buildings, what is the steel
intensity and so on and we think that this trend is going to go on for
the 20 years that we’ve forecast,” he said.
BHP Billiton, Vale, Rio Tinto Iron Ore Prices
Friday, December 18, 2009
Domestic Steel Industry Remains Flat
The steel industry is one of the first looked to to see if there are signs of sustainable recovery or not, and the news from that from for domestic steel isn't good.
Even though domestic steelmakers have improved their capacity utilization, it has done nothing to generate demand for steel, as there's simply little activity to spur demand for steel, and nothing will change that any time soon.
Steelmakers say not only is there not much demand for steel, but they don't expect demand to increase in the near future at all.
This does change somewhat for overseas markets where deamdn for iron ore and seaborne coking caol is increase from Asian steelmakers. Coal exporters are very excited about how this will drive demand for their products.
For 2010 it looks like coal to supply Asian steelmakers will be in high demand, with some producers saying they've already sold out of their inventory, with iron ore expected to face demand pressures as well.
Even though domestic steelmakers have improved their capacity utilization, it has done nothing to generate demand for steel, as there's simply little activity to spur demand for steel, and nothing will change that any time soon.
Steelmakers say not only is there not much demand for steel, but they don't expect demand to increase in the near future at all.
This does change somewhat for overseas markets where deamdn for iron ore and seaborne coking caol is increase from Asian steelmakers. Coal exporters are very excited about how this will drive demand for their products.
For 2010 it looks like coal to supply Asian steelmakers will be in high demand, with some producers saying they've already sold out of their inventory, with iron ore expected to face demand pressures as well.
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