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| Japanese Integrateds To Begin Ship Plate Export Talks For ROK Next Week |
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Japanese integrated steelmakers are expected to begin their ship plate export negotiations next week with South Korea's major shipbuilding companies such as Hyundai Heavy Industries Co for shipments in April-September 2006. Indications are that Nippon Steel Corp will spearhead the negotiations with Hyundai at the request of the Korean customers, and then other Japanese steelmakers will enter their separate talks. It is likely that the Japanese steelmakers as a whole will offer supplies at US$680/ton FOB, the present contract price. Behind the outlook lies each Japanese steelmaker's judgment that there is no factor for a price reduction in tight supply-demand conditions for ship plates in Japan. At home, the Japanese steelmakers are set to start negotiations shortly with various shipbuilding companies on ship plate price increases for shipments in April-September 2006. On the contrary, there are forecasts that the Korean shipbuilding companies will take a tougher position each than before in negotiating ship plate imports with the Japanese steelmakers this time. In this connection, informed sources point out several factors. First, South Korea's integrated steelmaker Posco has a domestic price reduction in effect of W30,000/ton (a level of US$30/ton) in its ship plate shipments from January this year. Second, the Korean shipbuilding companies face the need to further rationalize their operations with measures such as a cost reduction of the ship plates they take. In this connection, an appreciating won to the US dollar remains to dent earnings in what the Korean shipbuilding companies take up as ship exports. Third, domestic heavy plate prices are on the downside in various Asian nations such as China. Besides, it is understood that the Korean shipbuilding companies are bullish in their price requirements of ship plate imports from Japan because they can negotiate alternative heavy plate purchases from China at much lower prices than Japanese supplies. In South Korea, domestic demand for ship plates is expected to total 5,500,000 tons in 2006, up 300,000 from 2005. There are prospects that the incremental demand will be met with supplies from Posco. Japanese heavy plate exports to South Korea are estimated to have totaled 1,700,000-1,800,000 tons in 2005, with the first 1,500,000 in ship plates. Meanwhile, Chinese exports of heavy and medium plates to South Korea are believed to have totaled around 800,000 tons in 2005, with the first 200,000 tons for shipbuilding materials. There is a possibility that the Chinese export volume for South Korea will increase by a maximum 100,000 tons or so in 2006, market sources believe. |
| last modified : Wed 18 Jan, 2006 [14:06] |
