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| Posco In Action For GO Elec Sheet Exports At Low Prices |
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South Korea's Posco has embarked on its exports of GO (grain oriented) electrical sheets at low prices, mainly for shipments to Asian destinations, according to market sources. The company's offer prices on FOB terms are seen as lower by nearly US$1,000/ton than what Japan's integrated steelmakers charge for their exports of GO electrical sheets. It is understood that Posco's export offensive for GO electrical sheets stems from the need to expand outlets in enlarged production capacity. Until now, the company has reinforced its production capacity of GO electrical sheets by 80,000 tpy to 250,000 tpy. It is unlikely that Japan's exports of GO electrical sheets will come under an immediate influence from Posco's low-priced exports because Japanese integrated steelmakers usually negotiate annual or semiannual export contracts of GO electrical sheets. The Japanese steelmakers are on track to negotiate for export contract renewals of GO electrical sheets in and after October this year. In this connection, there are few prospects of Posco entering the field of premium GO electrical sheets in which the Japanese steelmakers boast their strong point. As to medium- and low grades, though, the Japanese steelmakers could face cases of competing with Posco's exports at low prices. Therefore, it is considered certain that the Japanese steelmakers will face various customers' requests for a certain price reduction in supplies of medium- and low-grade GO electrical sheets. As matters now stand, the Japanese steelmakers are concerned about how long Posco will continue its low-priced exports of GO electrical sheets. Until last year, the world's supply-demand conditions for GO electrical sheets were too tight to meet various users' requirements due to a limited number of steelmakers as suppliers. This year, though, the global supply-demand conditions are slackening amid deferrals of many electric power projects, which indicates a major change in the environment for transactions of GO electrical sheets. In the USA, AK Steel Corp recently negotiated low-priced exports of GO electrical sheets to China, export sales to meet a fall in the USA's domestic demand. China's Wuhan Iron & Steel Group Corp (Wisco) has reacted with a major price reduction in its domestic sales of GO electrical sheets. As a result, Wisco's current asking price translates into a level of US$3,000/ton, compared the earlier one of US$5,000/ton. Also, Wisco and Baosteel Co Ltd solicited the Chinese government in late May for an antidumping investigation into imports of GO electrical sheets from the USA (AK Steel) and Russia (Novolipetsuk Iron & Steel Corp). As a result, the Chinese government's AD investigation is under way at present. In this connection, there was speculation that South Korean GO electrical sheets, too, may become a subject of the Chinese AD investigation. Actually, however, the Chinese government has excluded the Korean products from its AD investigation. The Chinese government is believed to have favored a solution to the steel trade dispute in point via a Sino-Korean steel industry dialogue. |
| last modified : Thu 30 Jul, 2009 [10:00] |
