ArcelorMittal's $400 price hike on offer in 2009 US tinplate deals

ArcelorMittal USA has offered a price increase of $400/ton in its tinplate sales negotiations with various can manufacturers in the USA for shipments in 2009, it was learned in Tokyo Wednesday. As a result, other US tinplate producers are expected to follow suit for their domestic shipments in 2009.


The US steel industry has been operating at less than 50% of capacity since the beginning of December. Its steel capacity utilization was 49% last week. In the USA, domestic demand for steel products is way down in consuming sectors ranging from autos to building materials. As a result, local transaction prices of steel products face a steep fall as a whole.
Under the existing circumstances in the USA, it is a matter of attention that ArcelorMittal USA is trying to win a considerable price increase in its tinplate contract negotiations for shipments in 2009. The price increase is believed to have stemmed from the company's policy to meet a surge in the costs of raw materials.

In the USA, most of the domestic tinplate shipments are usually negotiated under annual supply contracts, for which negotiations on contract renewals start from the October-December quarter of each year. For shipments in 2008, the contract renewal negotiations started in the October-December quarter of 2007 and a price increase of $100/ton was agreed after the beginning of 2008. At the time, though, the price terms settled were devoid of a pass-along to meet a surge in raw materials costs because there were no forecasts that prices of raw materials such as iron <http://metalsplace.com/news/iron-steel/> ore, coking coal and tin <http://metalsplace.com/news/tin/> would soar to an abnormal level.

In the USA, consumer spending is considerably declining in the repercussions of the financial crisis, a situation that applies to foodstuffs as well. But canned foodstuffs are an exception. Among general households, more of them are opting to avoid purchasing perishable foods while stocking up on canned nonperishables in large amounts for thrifty life. Accordingly, tinplate demand for canned foods is described as favorable.

A major price increase for tinplate shipments in the USA will exert a favorable influence on tinplate exports out of Japan, Europe and the USA to Latin America, market sources forecast. As far as US steelmakers are concerned, they are expected to exercise moderation in reducing what they charge for tinplate exports to Latin America.

Meanwhile, Japan's integrated steelmakers find it difficult to respond with active tinplate exports to the USA even if local transaction prices of tinplate have advanced considerably in 2009. For the main bottleneck, Japanese tinplate imports into the USA are subject to the existing 95% antidumping duty. Back in June 1999, the US steel industry filed an antidumping case against tinplate imports from Japan. Then, the US International Trade Commission admitted injury of the imports to US steel mills in its final determination, under which the 95% AD duty was imposed on the imports. The AD duty came under a sunset review in 2006, which led to its continuance. TEX Report

ArcelorMittal US eying price hike for tinplate sales

Tex reported that ArcelorMittal USA has offered a price increase of USD 400 a tonne in its tinplate sales negotiations with various can manufacturers in the USA for shipments in 2009. As a result, other US tinplate producers are expected to follow suit for their domestic shipments in 2009. It may be noted that the US steel industry has been operating at less than 50% of capacity since the beginning of December. Its steel capacity utilization was 49% last week. In the USA, domestic demand for steel products is way down in consuming sectors ranging from autos to building materials. As a result, local transaction prices of steel products face a steep fall as a whole. Under the existing circumstances in the USA, it is a matter of attention that ArcelorMittal USA is trying to win a considerable price increase in its tinplate contract negotiations for shipments in 2009. The price increase is believed to have stemmed from the company's policy to meet a surge in the costs of raw materials. Meanwhile, Japan's integrated steelmakers find it difficult to respond with active tinplate exports to the USA even if local transaction prices of tinplate have advanced considerably in 2009. For the main bottleneck, Japanese tinplate imports into the USA are subject to the existing 95% antidumping duty. Back in June 1999, the US steel industry filed an antidumping case against tinplate imports from Japan. Then, the US International Trade Commission admitted injury of the imports to US steel mills in its final determination, under which the 95% AD duty was imposed on the imports. The AD duty came under a sunset review in 2006, which led to its continuance. (Sourced from Tex Reports)