Hot rolled coil development Worldwide by qdk21196

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									  NEWS                      www.interkov.com
                                                                                                                No: 2/ June 2008
We are cer tain, that everyone within the stationery business is keenly aware about
the increase of steel prices. This increase is caused by the continuing strong up-
ward trend of raw material-, energy- and transportation prices.

Therefore this extra pricing issue of the Interkov Newsletter is dedicated to the steel
pricing theme. Our aim is to give you an over view about the raw material situation we
and other companies are facing at the moment.



 Topics:                                                              Hot rolled coil development
                                                                      Worldwide
 Steel prices explosion
          - Hot rolled coil - HRC (semiproduct for strips)            Reference prices of the Steel Index at the beginning of June show
                                                                      clearly that all US and European coil prices jumped upwards again.
          - Wire rod (semiproduct for wire)
                                                                      Since the beginning of 2008 the HRC price went up 42,6%!

 2008/2009 Forecast                                                   Today the Polish ex-works price for HRC is already above €700 per
                                                                      tonne and is expected to rise by around €20-25 per tonne for July and
                                                                      August deliveries.
 Steel prices explosion
                                                                      Within the US coil prices rose, with HRC showing the biggest increase.
                                                                      The US HRC reference price FOB Midwest mill is $43/short tonne higher
For us as a producer of lever arch mechanisms the prices              at $1088/short tonne ($1199/tonne).
of hot rolled coil - HRC - and Wire Rod have the biggest
                                                                      The HRC ex-works reference price in northern Europe rose to €692 per
inf luence on the production costs of our product.
                                                                      tonne ($1089/t) and the price for cold rolled coil – CRC - increased
                                                                      sharply to €797 per tonne ($1255/t) in the end of May. In southern Euro-
Actual material prices of these major cost factors compared with      pe, HRC was €10/t higher with the highest delivery times ever.
January 2008 show:
                            Wire Rod – increased by 64,9 %            The domestic Turkish HRC reference price, ex-works, is quoted
                                HRC – increased by 42,6 %             at $1,098 per tonne.

According to the oficial forecasts a further growth of at least 40%   Prices for Chinese exports to Europe and North America also rose again
is expected until the end of the year.                                in the end of May. Chinese HRC, FOB stowed China port, went up $27/t
                                                                      at $983/tonne, while the Chinese CRC is also higher at $1088/t.

                                                                      “Production costs have obviously
                                                                      gone up, but that is not the only
                                                                      reason for the rising of steel prices”,
                                                                      a Polish stockholder tells Steel Busi-
                                                                      ness Briefing, appearing to imply
                                                                      that price rises for coil appear to
                                                                      be outpacing raw material cost
                                                                      increases.


                                                                      Source: Steel Business Brief ing
                                                                      2008


 Dìèínská 32/33, 407 22 , Benešov nad Plouènicí, Czech Republic        e-mail: sales@interkov.com, Tel.: +420 412 599 111, Fax: +420 412 599 115
 NEWS                       www.interkov.com
                                                                                                                         No: 2/ June 2008


HRC 2008 development                                                                                        HRC - S. Europe domestic
                                                                                   780
                                                                                   760
                                    HRC - N. Europe domestic                       740
             780                                                                   720
             760                                                                   700
             740                                                                   680
             720                                                                   660640
             700                                                                   640620
             680                                                                   620600
             660                                                                   600580
             640                                                                   580560
             620                                                                   560540
             600                                                                   540520
             580                                                                   520500
             560                                                                   500480
             540                                                                   480460
             520                                                                   460
             500                                                                            Jan 08                        Apr 08                Jun 08

             480
             460
                   Jan 08                         Apr 08               Jun 08




          HRC - N.Europe domestic Ex-Works /t                    Period: 1/Jan/08 - 30/Jun/08                 Currency: EUR
                                min                                      max                                  average
          Jan 08                475                                      500                                  487,5
          Feb 08                490                                      560                                  525
          Mar 08                545                                      590                                  567,5
          Apr 08                610                                      650                                  630
          May 08                620                                      720                                  670
          Jun 08                660                                      730                                  695


          HRC - S.Europe domestic Ex-Works /t                    Period: 1/Jan/08 - 30/Jun/08                 Currency: EUR
                                 min                                     max                                  average
          Jan 08                 470                                     490                                  480
          Feb 08                 560                                     600                                  580
          Mar 08                 600                                     700                                  650
          Apr 08                 650                                     700                                  675
          May 08                 700                                     730                                  715
          Jun 08                 700                                     750                                  725

Dìèínská 32/33, 407 22 , Benešov nad Plouènicí, Czech Republic                  e-mail: sales@interkov.com, Tel.: +420 412 599 111, Fax: +420 412 599 115
   NEWS                       www.interkov.com
                                                                                                                        No: 2/ June 2008

Wire rod Worldwide
Also the prices for wire rod have increased by around €90-100 per ton within the last two weeks and show
an increase of 64,9 % since January this year.

Current wire rod prices are between €750-820 per ton and wire                             Wire Rod (mesh quality) €/t delivered
rod prices continue to sky rocket. Especially the price in southern    850
Europe has an increase of over €100 per ton this month.
                                                                       800
For June prices of wire rod are expected to exceed €800 per ton        750
with forecast of further increases, perhaps approaching the €900
                                                                       700
per ton mark. The main problem is that levels of scrap production
do not equate to the increased number of steel mills worldwide.        650
Strong levels of production are leaving little scrap to be bought      600
thus prices increase.
                                                                       550

Scrap prices are still soaring and continue to af fect this product.   500
It now stands at around €500/t and will reach €560/t by June or        450
July.                                                                        Jan 08                                   Apr 08                     Jun 08

Source: Steel Business Briefing 2008


 Wire Rod (mesh quality) / Europe domestic delivered /t                       Period: 1/Jan/08 - 30/Jun/08
 Currency: EUR
                         min                      max                                              average
 Jan 08                  450                      520                                              485
 Feb 08                  500                      570                                              535
 Mar 08                  540                      600                                              570
 Apr 08                  600                      680                                              640
 May 08                  700                      820                                              760
 Jun 08                   750                     850                                              800




 Dìèínská 32/33, 407 22 , Benešov nad Plouènicí, Czech Republic                e-mail: sales@interkov.com, Tel.: +420 412 599 111, Fax: +420 412 599 115
  NEWS                      www.interkov.com
                                                                                                                      No: 2/ June 2008

Forecasts
Nowadays prices of steel are changing day by day.

As it was already mentioned, the official forecasts expect a price growth for steel
of at least 40 % until the end of 2008.

If the steel prices – means HRC and wire rod - per ton increases by 400 EUR
Jan 2008/Jan 2009, it will cause a rise of the cost of lever arch mechanisms
and other related products of at least 25 % within 12 months.




Also for 2009 the steel prices are expected to keep on increasing!

 + 25 %
                                                                                                                COSTS DEVELOPMENT

                                                                                                                        Costs
 + 20 %


                                                                                                                Particularly you can
 + 15 %
                                                                                                                see the development
                                                                                                                on the following graph
                                                                  forecast                                      showing costs growth
                                                                                                                of our production from
 + 10 %
                                                                                                                the beginning of the
                                                                                                                year 2008 till January
                                                                                                                2009.
  +5%




       0

           Jan           Mar          May          July      Sept            Nov         Jan 09
   -5%


Although tried to keep our prices for as long as possible, we can no longer prolong the inevitable.
Due to the continuing increase of raw material prices, we are unable to keep on absorbing all these
extra expenses. After careful consideration we need to adapt prices of our lever arch mechanisms
to keep pace with increasing costs.

We hope that you understand that this fair price adaptation is needed to save our further existence.

 Dìèínská 32/33, 407 22 , Benešov nad Plouènicí, Czech Republic              e-mail: sales@interkov.com, Tel.: +420 412 599 111, Fax: +420 412 599 115

								
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