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Summary:

Monthly Report on China HRC/CRC Market for April, 2009

China HRC/CRC market rallied in April. Statistics data from SteelHome Website disclosed that up to April 30, 2009, 1.0mm CR sheet, 2.75mm and 5.75mm HR coil were priced at CNY 4196, CNY3506 and CNY 3342 per ton on the average of prices from 28 key cities, down CNY81, 61 and 37 per ton compared with the end of March.

Fast increase in supply together with the slow demand increment defines the keynote of the HRC/CRC development. Chinese government’s efforts to expand domestic demand pinned market demand and lowered market stock, it is forecasted that HRC/CRC price would trend up in May.

I HRC/CRC price bottomed out in April

I.1 HRC/CRC output approaches the normal level

I.2 HRC/CRC import surged drastically, while export maintain at low level

I.3 China HRC/CRC supply in March

I.4 Rebound domestic demand cut CR coil inventory constantly

II HRC/CRC market outlook in May

II.1 Crude steel output plummet worldwide cushioned steel price

II.2 Raw material cost bottomed out at large

II.3 Domestic steel mills hard to reduce ex-works price further

11.4 Grim export perspective in China

11.5 More money supply might spike rapid increase in investment and consumption

Table 1: SteelHome (China) Steel Price Index for April 2009

Table 2: HRC/CRC prices in key markets in April 2009

Table 3: China HRC/CRC output in Q1 2009

Table 4: HR coil ex-works price adjustment in April

Table 5: CR coil ex-works price adjustment in April

Graph 1: Average price of HRC/CRC in key Chinese Markets in 2008-2009

Graph 2: Monthly output of HR coil in 2008-2009

Graph 3: Accumulative output of HR coil in 2008-2009

Graph 4: Monthly output of CR coil in 2008-2009

Graph 5：Accumulative output of CR coil in 2008-2009

Graph 6: Daily output of HRC/CRC in 2007-2009

Graph 7: HRC monthly import and export in 2008-2009

Graph 8: CRC monthly import and export in 2008-2009

Graph 9: HRC supply and growth in 2008-2009

Graph 10: CRC supply and growth in 2008-2009

Graph 11: Daily supply avg. of HRC/CRC IN 2007-2009

Graph 12: HRC/CRC inventory in key Chinese markets in 2007-2009

Graph 13: Daily sales of HRC in Shanghai market in 2008-2009

Graph 14: SteelHome (China) steel price index

Graph 15: HRC price in key countries in 2008-2009

Graph 16: CRC price in key countries in 2007-2009

Graph 17: SteelHome (China) raw material price index in 2007-2009

Monthly Report on China Construction Steel Market for April, 2009

China construction steel market bottomed out in April, but the pressure of supply is still existing as exports dampen and production rise at a rapid pace. Apparent consumption of bar& rebar and wire rod during the first three months attained 38.2523 million tons and 20.5383 million tons, up 12.66% and 11.3% year on year.

In the first quarter, fix-asset investment and spending in real estate industry was seen rapid hike, and investment in new construction projects surged 87.7%. Also domestic enterprises don’t feel the pinch of money supply. Therefore, China construction steel market will present general upward trend in May.

I Construction steel market in April

I.1 Production surged up while export dampened

I.1.1 Export volume continue slumping.

I.2 Investment in fix-asset and property industry accelerates, which would augment construction steel demand

I.3 Marketplace inventory plummeted

II China construction steel market in May

II.1 Construction steel production remains highly

II.2 Construction steel demand is anticipated to augment further, driven by government’s stimulus plans

II.3 New credit loans hit record high

II.4 Steel mills raise ex-works price

II.5 The decline of raw material price may not bolster construction steel market

Table 1: Spot price of China wire rod/rebar in April

Table 2: Steel mills raise ex-works price

Graph 1：Q235 6.5mm wire rod price trend in April 2009

Graph 2: HRB335 20mm rebar price trend in April 2009

Graph 3: Monthly production of construction steel and yearly growth in 2008-2009

Graph 4: Accumulative production of construction steel in 2008-2009

Graph 5: Daily production of construction steel in 2008-2009

Graph 6: China construction steel imports in 2008-2009

Graph 7: China construction steel exports in 2008-2009

Graph 8: China billet/slab impo & expo in 2008-2009

Graph 9: Apparent consumption of construction steel in 2008-2009

Graph 10: Accumulative apparent consumption of construction steel in 2008-2009

Graph 11: China Township FAI in 2008-2009

Graph 12: Investment in real estate industry in 2008-2009

Graph 13: Marketplace inventory of construction steel in 2008-2009

Graph 14： Money supply in China domestic market for 2008-2009

Monthly Report on China Iron Ore Market for April 2009

Domestic iron ore price drop slowed down in April with the accumulative decrement reaching 10-50 yuan per ton.

Most of small-and-medium mines shut down except large mines and captive ores owned by steel mills. Iron ore export quotation was flat with that of last month. 63.5 percent of Indian fines was quoted at US$ 64-66 per ton (CIF), and 62/63 percent of Australian fines was priced at US$ 60-62 per ton. People paid more attention to FY 2009 international iron ore long-term contract price talk. Due to narrowing price gap between domestic and imported ores, as well as output cut, it is predicted that iron ore price in May will continue fluctuating in May.

I Iron ore price at home went down by small margin

II market analysis on iron ore market in April

ll. 1 Newly additions of iron ore supply in May at home market will retain at high level

II.2 Iron ore import price rallied

II.3 Ocean freight rallied with upward trend

II.4 Iron ore inventory at port soared sharply

ll. 5 Domestic steel price vibrated slightly in April

ll. 6 No result Achieved for FY 2009 international iron ore contract price talks

Table 1: China iron ore price in Jun.2008-Apr.2009

Table 2: Steel Price Changes at Domestic Market (taking Shanghai market as an example)

Graph 1: China iron ore price in 2008-Apr. 2009

Graph 2: China iron ore putput and import contrast in 2008-Mar. 2009

Graph 3: Price contrast between domestic and imported ore in 2008-Apr. 2009

Graph 4: International ocean freight in 2008-Apr. 2009

Graph 5: China iron ore imports & inventory at ports in 2008-Apr. 2009

Monthly Report on China Scrap Market for April 2009

Due to low demand for steel and the flood of cheaper imported resources, Chinese steelmakers commonly cut the orders in domestic scrap markets in the first half of April, which caused a decline in market price of scrap. In latter half of April, steel price stopped the downtrend and stabilized gradually, and parts of steelmakers in East China and Northeast China , with low scrap stocks, started to raise the offer of scrap and to replenish warehouses.

In May, scrap supply to China will be affected by May Day and busy farming season, and the rally in international scrap market may drag down the growth of scrap imports. SteelHome predicts that scrap price in domestic market will increase slightly in May.

I Review on China scrap market of April 2009

l. 1 Domestic scrap price volatilized mildly