There has been no change in most tinplate markets over the last month. The bias remains to the downside in spot markets as falling second half HR coil prices work their way through the value-chain. Producers meanwhile remain keen to keep prices from falling too far in order to avoid prices falling through their 2011 annual contract price. They have been helped somewhat by unexpected supply outages in Europe, North America and Thailand. However, the big change this month has come in steel raw materials with iron ore and coal spot prices down sharply. This is important for contract negotiations. Over the last two years, mills have pointed to the high price of iron ore and coal as key factors in higher contract prices. If we enter the contract season in an environment of rapidly falling raw material prices then mills will have one of their key supports undermined. This may lead to a downward revision of our current expectation of annual contract roll overs or small gains. There will also be increased pressure on mills to reduce the length of the contracts with the preference for quarterly changes.
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