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| Integrateds' Steel Export Talks With Japanese-Affiliated Electro Makers |
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Japanese integrated steelmakers see their export negotiations moving toward settlement on new supplies of hot-dip galvanized (HDG) sheets to Japanese-affiliated consumer electronics manufacturers in Asian destinations, mainly in China. The Japanese steelmakers are struggling to talk their customers into an agreement each by the end of July. On their part, the customers want to conclude semiannual supply contracts as they have done before instead of quarterly deals. If the two sides come to terms, the new prices will move up to a level far beyond US$700/ton FOB, market sources believe. The Japanese steelmakers started their negotiations this time, assuming that each quarterly supply contract is concluded with a price increase of US$100/ton for July-September shipments. But the Japanese-affiliated consumer electronics manufacturers reacted negatively to a major price increase. As a result, the negotiations have made no progress so far. But there are signs that the Japanese-affiliated consumer electronics operators admit no option but to accept a certain price increase for imported HDG sheets from Japan in the wake of a domestic price increase by China's Baosteel Co Ltd. Baosteel has execute a cumulative price increase of HDG sheets by the equivalent of US$130/ton for July-August shipments. Besides, the Japanese-affiliated consumer electronics companies have proposed that half-year supply contracts be brought back as in the cases before instead of quarterly contracts. They presumably see a possibility that a major price increase will go with each renewal of the quarterly contract, market observers suggest. As to demand for HDG sheets in Asia, demand relating to office automation equipment has yet to a show solid recovery. In contrast, demand relating to TV sets indicates a major growth in the structural change from a TV with the cathode-ray tube to one with the LCD (liquid crystal display) screen. Also, demand for white goods such as washing machines is on the upswing both in China and Southeast Asia. With a favorable environment returning for their operations, the Japanese-affiliated consumer electronics manufacturers favor purchasing HDG sheets from Japan under semiannual supply contracts as they have secured in the past. The Japanese steelmakers, meanwhile, are considering executing a price increase of US$100/ton in the HDG sheet exports they negotiate with the Japanese-affiliated consumer electronics producers for shipments in the latter half of this year. |
| last modified : Mon 27 Jul, 2009 [10:30] |
