A Flat Spot Before 2010 Recovery
09-11-2009

As far as Chinese mills are concerned, the Christmas buying period for USA and Europe has been over for a while. Whilst Chinese mill inventories are no longer in stress export demand for their finished materials, buying will remain slow for the remainder of the year. Some buyers are forecasting a slight price reduction until January 2010, whilst others will want to build stock prior to the Chinese New Year next February. It is likely by mid December that prices will in fact tend to firm for bulk grades, either due to demand, ocean freight increases or confusion with Chinese import licences which can be slow for the smaller consumer mills.

Demand in other parts of Asia remains strong with some countries increasing capacity during 2010 after postponements during the 2009 recession. Consequently, this capacity increase may see bulk grades in higher demand to the point of a further supply tightening as new mills endeavour to build raw materials inventories.