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| HOME >> Topics List >> April, 2009 >> 28 (Tue) |
| Stalemated Price Talks In Japano-Korean HR Coil Deals |
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Japanese integrated steelmakers face stalemated price negotiations in their deals of HR coil exports to South Korea for April-June shipments. For the main reason, South Korea's various steelmakers regard as a problem rising HR coil exports out of Japan to South Korea at lower prices than what applies at home. Japanese HR coil exports to South Korea totaled 260,000 tons in January-February 2009, down 51.3% from the same period of 2008. The monthly export volume, though, increased by 12,000 tons from 124,000 tons in January to 136,000 tons in February. The monthly export volume was believed to have increased in March as well although no definite figures are available so far. In this connection, there are signs that the Japanese steelmakers are taken by the Korean steelmakers as pushing HR coil sales into South Korea at low prices amid a fall in HR coil demand. It is understood that the Japanese steelmakers are executing continued HR coil exports to South Korea at provisional prices after the beginning of the April-June quarter while negotiating for definite price terms of April-June shipments. The provisional prices apply in principle as flat levels to meet what was settled for January-March shipments. But they vary widely from US$570/ton FOB to US$470/ton or US$420/ton FOB. Word has it that some deals may have shaped up this time at US$420/ton FOB or below. The Japanese steelmakers, though, find themselves in a virtual suspension of their negotiations as signs of tension are pervading South Korea's steel industry circles. To the Japanese steelmakers' disadvantage, their HR coil exports to South Korea threaten to invite dumping accusations. In South Korea, Posco's official HR coil price (which is viewed as W880,000/ton or W850,000/ton) represents a nominal quotation, according to market sources. Until now, Posco is said to have lowered the asking price of HR coils for its domestic customers to W670,000/ton (US$479 at an exchange rate of US$1.00-W1,400) or to W690,000/ton (US$493), thereby fighting price competition from HR coil imports into South Korea from Japan and China. It is considered impossible for South Korea's steel rerollers to use HR coils from Posco, given that its official HR coil price is beyond what the steel rerollers charge for the CR sheets they sell. In fact, the steel rerollers had no option but to depend on imported HR coils from Japan and China until recently for their CR sheet production. At present, Posco is described as eager to win back its share in the domestic HR coil market. Accordingly, there are signs that the company is contemplating executing a more price reduction in its domestic deals of HR coils while struggling to eliminate inflows of low-priced HR coils from Japan. |
| last modified : Thu 07 May, 2009 [11:22] |
