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|Integrateds To Offer $50 Price Hike In Non-GO Elec Sheet Exports To China|
Japanese integrated steelmakers are expected to offer a price increase of US$50/ton as a whole in their negotiations on exports of non-GO (grain oriented) electrical sheets to China for shipments in the April-June quarter. If the price increase goes through, the new prices will hit a level beyond US$700/ton C&F, meeting what the Japanese steelmakers initially targeted. |
In China, major integrated steelmakers have already announced what charge for domestic shipments of non-GO electrical sheets in the April-June quarter. As a result, the new prices are translate into levels of US$699/ton (up US$88) for products from Baoshan Iron & Steel Co (Baosteel), US$696/ton (up US$62) for those from Wuhan Iron & Steel Group Corp (Wisco), and US$676/ton (up US$62) for Anshan Iron & Steel Group Corp (Ansteel).
The new Chinese prices are much higher than what the Japanese steelmakers have negotiated in their exports of non-GO electrical sheets to China for shipments in the January-March quarter. The Japanese prices under contract stand at a level of US$630-640/ton FOB. As to non-GO electrical sheets, the FOB prices of Japanese exports to China are usually higher than what Chinese steelmakers apply in their domestic sales. As a result, it follows that the Japanese steelmakers need to execute a price increase of close to US$100/ton in what they export to China for Q2 shipments, given the three Chinese steelmakers' new domestic prices.
The Japanese steelmakers had no forecasts that the three Chinese steelmakers (Baosteel, Wisco, and Ansteel) would opt to price up their products so much. Accordingly, the Japanese steelmakers first aimed at a price increase of around US$50/ton in their exports of non-GO electrical sheets to China for Q2 shipments in the belief that the Chinese steelmakers would announce a mild price increase each. Then, the major price increases announced by the Chinese steelmakers took the Japanese steelmakers by surprise, and the Japanese steelmakers decided to review what they had considered while watching price practices of Taiwan's integrated steelmaker China Steel Corp (CSC) and South Korea's integrated steel giant Posco for Q2 shipments of non-GO electrical sheets.
Until now, CSC has announced a domestic price increase of non-GO electrical sheets in the equivalent of US$21/ton to a level of US$636/ton. Meanwhile, Posco is said to have offered a price increase of US$50/ton to a level of US$700/ton C&F in its export deals of non-GO electrical sheets for southern China. CSC, too, is expected to offer a certain price increase in its exports there.
Under the existing circumstances, the Japanese steelmakers look set to seek a price increase of US$50/ton as initially planned in their negotiations on exports of non-GO electrical sheets to China for Q2 shipments. The negotiations are scheduled to start next week.
Meanwhile, with price increases of around US$50/ton on offer, the Japanese steelmakers have semiannual deals under negotiation on exports of non-GO electrical sheets to Japanese-affiliated users in Asian destinations other than China for January-June shipments.
|last modified : Tue 20 Mar, 2007 [11:28]|