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| Posco Heavy Plate Exports To SE Asia At $500 C&F Level |
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South Korea's integrated steelmaker Posco has negotiated heavy plate exports to Southeast Asia at around US$500/ton C&F for the shipbuilding material, a price level that is estimated at US$450/ton FOB, according to information made available in Tokyo. South Korea's electric steelmaker Dongkuk Steel Mill Co is said to have done likewise. As a result, there is a strong possibility that transaction prices of heavy plates for export will trend downward in Asia as a whole. China's heavy plate export prices for South Korea have already receded to US$450/ton FOB or below. Posco reduced its domestic sales prices of heavy plates by W100,000 to W820,000/ton (US$661) for ship plates and by W160,000 to W820,000/ton for commodity-grade products, effective with May 15 shipments. Dongkuk Steel followed suit. But Posco's and Dongkuk Steel's current export prices of heavy plates are still lower by the equivalent of nearly US$200/ton than their new domestic prices of heavy plates. In this connection, South Korea's major steelmakers including Hyundai Steel Co are eager to develop sales outlets for heavy plate production from an expansion or a new installation of capacity at their works. With positive heavy plate exports, they are also contemplating meeting slack domestic supply-demand conditions for heavy plates. Hyundai Steel and Dongkuk Steel are scheduled to commission a new heavy plate mill (capacity: 1,500,000 tpy) each between the summer and the latter half of this year. Also, Posco is due to bring on stream new facilities at its Kwangyang works in mid-2010 for heavy plate production of 1,500,000-2,000,000 tpy. As a result, it follows that heavy plates in a total quantity of close to 5,000,000 tpy will become available anew in South Korea. How those heavy plates will be marked is a matter of attention. In the case of Posco, the company looks set to struggle for enlarged domestic sales, thereby driving imported heavy plates from China and Japan out of the domestic market. Also, Posco is expected to promote positive exports of heavy plates. Information is circulating that the company has already begun the promotion of sales into Japan. There are signs that Dongkuk Steel and Hyundai Steel, too, are poised to promote export deals of heavy plates. Until now, a low price level of US$300/ton FOB for heavy plates has emerged in export markets of Asia. There are forecasts that offer prices will decline to a level of US$300/ton FOB as well in heavy plate exports out of South Korea if Posco, Dongkuk Steel, and Hyundai Steel compete intensely with one another for an expansion of export sales. Meanwhile, Japan's integrated steelmakers have a half-year supply contract each of heavy plate exports to South Korea at a price level of US$600/ton FOB for April shipments onward. |
| last modified : Wed 27 May, 2009 [10:40] |
