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| Japanese Integrateds To Resume H-Beam Export Talks On Korean Deals |
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Japan's integrated steelmakers are expected to resume negotiations next week on their H-beam export deals with South Korea's various users for November shipments. The Japanese steelmakers presented the Korean users with offers in late September. But the Korean users took a wait-and-see position and stopped negotiating for H-beam imports from the Japanese steelmakers. As a result, the two sides put their negotiations on hold until the end of China's 60th anniversary of its foundation and the subsequent holidays. Behind the Korean users' standoff lay two main factors, according to market sources. First, there were H-beam offers from China to South Korea at fairly competitive prices before China's national foundation anniversary. Second, there were expectations in South Korea that weak prices of locally available ferrous scrap would lead to price reductions by electric steelmakers such as Hyundai Steel Co in their domestic sales of H-beams. Hyundai Steel, South Korea's largest electric steelmaker, raised what the company charges for H-beams by W50,000/ton each in August and September. As a result, the current asking price is settled at W910,000/ton, a quotation that translates into US$777/ton at an exchange rate of US$1.00-W1,170. The price increase in September, though, failed of penetration into local outlets. As a result, the actual distribution prices stand at a level of W860,000-880,000/ton (US$735-752). Ferrous scrap exports out of Japan to South Korea sold at Y25,000-26,000/ton FOB in early October. As far as Hyundai Steel is concerned, the company has secured Japanese ferrous scrap this week at Y24,000-24,300/ton FOB for No2 HMS. In this connection, it is considered difficult for the company to seek a price recovery of H-beams at home because the raw materials costs of H-beam production are on the downside. China's steelmakers offered H-beam exports to South Korea at US$560/ton FOB before China's national foundation anniversary. With the national foundation anniversary and the subsequent holidays over, information is circulating about lower offer prices of US$540-520/ton FOB in Chinese H-beam exports to South Korea. Aware of a changing environment, the Japanese steelmakers admit that it is difficult to seek an initially assumed US$650/ton C&F in the H-beam exports they negotiate for November shipments to South Korea. But they see no need to hold down H-beam prices to the level of the existing Chinese offers to South Korea, with a depreciating US dollar and an appreciating Korean won in the foreign exchange markets. Accordingly, the Japanese steelmakers expect price bargainings to focus on a level of US$600/ton C&F in resumed negotiations on their Korean deals of H-beams for November shipments, market sources believe. A high of the prices is settled at US$680/ton C&F in the Japanese steelmakers' H-beam exports under contract with the Korean customers for October shipments. |
| last modified : Wed 21 Oct, 2009 [10:19] |
