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No Japanese Exports To ROK In Ship Plates, HR Coils For Oct Shipments
Japanese integrated steelmakers have given up deals to export ship plates (heavy plates for shipbuilding) and HR coils to South Korea for October shipments due to stalemated negotiations with local customers that defy order intakes in the Japanese steelmakers' rolling plans to meet October shipments, TEX Report learned Monday.

The stalemate has continued for nearly one month since the Japanese steelmakers began their negotiations with South Korea's major shipbuilding companies and steel rerollers. If the stalemate remains intact this week, there is a possibility that the Japanese steelmakers will opt out of shipments in early November as well, given national holidays both in Japan and South Korea in October.

But the Japanese steelmakers have already closed alternative domestic and export deals to make up for lost ship plate exports to South Korea for October shipments. The domestic deals of ship plates are settled with various shipyards, and the export deals of heavy plates with energy-related industries, according to market sources. The sources estimate that the export deals provide for prices of around US$680/ton FOB in the world's tight flow of heavy plates for energy-related uses.

The Korean shipbuilding companies have yet to make any formal bid to accept a price increase in their ship plate imports under negotiation with the Japanese steelmakers. But there are signs that the Korean shipbuilders hope to settle their talks with the Japanese steelmakers before consecutive national holidays in Japan and South Korea in October. As a result, it is a matter of interest for the Japanese steelmakers whether the Korean shipbuilders show their intention to push the negotiations in earnest this week.

Meanwhile, the Japanese steelmakers face a tougher process of the negotiations with the Korean steel rerollers than with the Korean shipbuilders. Some Japanese steelmakers are considering making second-round offers within this week after the first-round offers at US$560/ton FOB. But an advanced appreciation of the won to the US dollar precludes a concessionary Japanese offer because it threatens to constitute dumping in relation to what South Korean integrated steelmaker Posco charges for domestic sales of HR coils. Posco's present domestic price for HR coils is W520,000/ton, a price level that goes beyond US$550/ton. With an appreciating won to the US dollar, the current environment is bound to ratchet up what the Japanese steelmakers offer in US dollars as the negotiations with the Korean steel rerollers to take more time to settle, market sources point out.

In South Korea, there is a rumor that Posco may resume a volume discount in domestic sales of HR coils, presumably one in a range of W20,000/ton (nearly U$20). If the resumption is a fact, it will give the Japanese steelmakers wider choices such offers to the Korean users, assuming the offers meet Posco's actual sales prices of HR coils at home.
last modified : Fri 29 Sep, 2006 [11:36]
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