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| Automotive Demand Recovery In Japanese Wire Rod Exports To Thailand |
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There is a probability that Japan's integrated steelmakers will see a pronounced recovery of automotive demand in their wire rod exports to Thailand from June onward, with assorted Thai orders on the increase, according to market sources Wire rod exports out of Japan to Thailand ended in a total of 2,986 tons in December last year, down 58.4% from February last year. Of the wire rod exports there, those for automotive use decreased by 70% from a peak level in October-December last year, by 50% in January-February this year and by 40% in March-April, which indicates a gradual recovery of automotive demand toward a pronounced one from June onward. There are signs that Thailand's auto industry recently completed its inventory adjustments of finished vehicles on the whole although unsold stocks still exist of pickup trucks in slack demand. Local manufacturers of automotive parts are reacting with increased assorted orders for automotive wire rods from Japan. As a result, it is likely that automotive demand will recover to 80% of a peak level in June for Japanese wire rod exports to Thailand. It is understood that Thailand's various manufacturers of automotive parts have few stocks of wire rods at present because they have promoted inventory adjustments of purchased materials since November last year. Accordingly, there is a strong possibility that their assorted orders for automotive wire rods from Japan will perk up once the Thai auto industry comes under a solid recovery of sales. Still, Japanese integrated steelmakers admit competition from low-priced wire rod exports to Thailand by South Korea's integrated steelmaker Posco. There is information on Posco's exports deals of high carbon wire rods at US$450/ton FOB for Thailand, an asking price that is lower by US$300 than what the Japanese steelmakers apply in their Thai deals. So far, though, Posco's export offensive is viewed as none of a menace to the Japanese steelmakers, certified suppliers of automotive wire rods for Thai customers. In Thailand, it is impossible for any new entrant to take up supplies of automotive wire rods unless separate certifications are made by local users. |
| last modified : Fri 17 Apr, 2009 [10:35] |
