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| HOME >> Topics List >> January, 2009 >> 29 (Thu) |
| Sino-Korean Ship Plate Deals For Q2 Shipments |
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It is likely that China's integrated steelmakers will enter the final stages of negotiations in the first week of February on their deals of ship plate exports to South Korea's various shipbuilding companies for shipments in the April-June quarter of 2009, according to information made available in Tokyo. Some deals under negotiation are intended for March-May shipments. There are prospects that Shoudu Iron & Steel Co will try to settle its deals at US$630/ton FOB, while Jiangsu Shagang Group Co Ltd will do likewise at US$620-610/ton FOB. The new prices, if agreed, will mark a major reduction of US$200 as compared with the existing settlements for January-March shipments. Most of the existing settlements are estimated at a level of US$840/ton C&F, with that of US$900/ton C&F in part. In South Korea's shipbuilding industry, three major companies still find themselves in favorable operations. The three companies are Hyundai Heavy Industries Co, Samsung Heavy Industries Co, and Daewoo Shipbuilding & Marine Engineering Co. But it is understood that the nation's small and midsize shipbuilding companies have an enhanced sense of crisis. In the background lies a two-point ordeal. For one thing, some of them face financial straits because advance payments are no longer available for the new shipbuildings they take up. In this connection, new ship orders with South Korea's shipbuilding industry have plunged since October last year. For another thing, the shipowners concerned have pressed hard for delivery deferrals of tonnage on order one after another. As a result, cancellations are said to have arisen in the new shipbuildings under contract for vessels such as bulk carriers. Aware of a hostile environment, South Korea's various shipbuilding companies indicate moves to use heavy plates in hand as much as possible so that they can reduce stocks of bought-in heavy plates while holding back on new purchases of heavy plates. Besides, they are said to be taking a tough position on purchased materials, particularly commodity-grade heavy plates bought from China. Under the existing circumstances, it remains to be seen what quantity of exports the Chinese steelmakers will negotiate in their ship plate deals with the Korean shipbuilding companies for April-June shipments. If the Sino-Korean ship plate deals are settled at around US$630/ton FOB this time, the new prices will become much lower than what South Korea's integrated steelmaker Posco currently charges for its domestic sales of ship plates. Posco's domestic price is settled at W920,000/ton, an asking price that translates into US$681/ton at an exchange rate of US$1.00-W1,350. Also, the new prices of Chinese ship plates for export will become lower than domestic prices in China, where Baosteel Co Ltd sets its domestic price of ship plates at Yn4,622/ton (US$680) after value-added tax for March shipments. Moreover, if the Chinese steelmakers' contract volumes of ship plate exports to South Korea increase markedly, it could lead to a diminution in Posco's domestic supplies of ship plates, getting on the Korean steel giant's nerves. There is even speculation that the Chinese ship plate exports to South Korea may provoke dumping accusations there, given the Chinese export prices at a fairly low level. |
| last modified : Tue 03 Feb, 2009 [11:06] |
