| The TEX Report Topics < Steel > | |
| HOME >> Topics List >> May, 2009 >> 20 (Wed) |
| Japanese Integrateds' Wire Rod Export Talks On Q3 Asian Deals |
|
Japanese integrated steelmakers are expected to start their wire rod export negotiations next week on Asian deals for shipments in the July-September quarter. At present, there are increased inquiries from various customers to the effect that they plan to place additional orders and whether the Japanese steelmakers can respond with shipments in the April-June quarter. As a result, the Japanese steelmakers believe that each customer has the intention of taking more supplies at what they regard as a bottom price because wire rod prices are forecast to advance in the July-September quarter. In South Korea, Posco reduced its domestic sales prices of wire rods last week by W130,000/ton to W830,000/ton for the material of tire cord quality. The new price translates into US$669/ton at an exchange rate of US$1.00-W1,240. Local users are said to have reacted with a question about whether Posco will further reduce its wire rod prices. Before the price reduction last week, Posco's asking price translated into US$678/ton at an exchange rate of US$1.00-W1,400. Posco is thought to have executed the price reduction to meet a fluctuation in the exchange rates of the won to the US dollar, which goes to show that the company has no leeway to reduce what it charges for wire rod exports. Therefore, the company's domestic price reduction this time is unlikely to become a factor for downward price pressure on wire rod export deals in Asia, the Japanese steelmakers point out. As to export demand for wire rods, the Japanese steelmakers see inquiries on the increase for CHQ (cold-heading quality) wire rods to meet requirements from public works projects in various nations' policies to expand fiscal spending. In Thailand, demand for motor vehicles is recovering after the completion of inventory adjustments for passenger cars and pickup trucks. As a result, Thai automotive demand for wire rods is under recovery. Besides, Thailand's October-December production plans for motor vehicles are seen as intended for increased production. As in the case of Thailand, China's auto industry has a recovery of business afoot. Accordingly, the Japanese steelmakers have active wire rod inquiries from China's manufacturers of automotive components. With a reviving auto industry both in Thailand and China, there are enhanced inquiries from local tire manufactures for what the Japanese steelmakers export as wire rods for steel tire cords. Under the existing circumstances, the Japanese steelmakers are considering raising prices in their deals of wire rod exports to Asian destinations for July-September shipments. Accordingly, they are expected to offer a certain price increase each in the deals they negotiate with awareness of a flat price level to meet the existing settlements for April-June shipments. |
 |
| last modified : Mon 25 May, 2009 [10:29] |
