HR coil exports out of Japan have begun to sell at around US$600/ton FOB in deals for shipments to Southeast Asia in the January-March quarter, according to Japanese steel industry sources. By comparison, Japanese export prices of CR sheets have already moved up to a level of US$700/ton FOB for new shipments to Asian destinations in the wake of tight supply-demand conditions for CR sheets.
In Asia, there are few signs of HR coil export deals by South Korea's Posco, market observers point out. Posco is scheduled to execute hot strip mill repairs seven times at its Kwangyang works in the first half of this year. As a result, the company's HR coil production is expected to decrease by 600,000 tons. But the company needs to increase HR coil supplies to its CR mill joint venture in Vietnam while providing black sheets for its galvanized sheet joint venture in Mexico. All things considered, it is understood that Posco will have to reduce what it sells as HR coils by a total of nearly 1,000,000 tons in its domestic and export deals.
In Southeast Asia, meanwhile, various CR mill operators are said to have begun recognizing the need to settle what they pay for HR coils at around US$600/ton FOB whereby they will stabilize their CR sheet production. In this connection, Japan's integrated steelmakers have yet to finish off all the negotiations on their deals of HR coil exports to Southeast Asia for January-March shipments. But it is likely that the Japanese steelmakers will agree with local customers on prices of close to US$600/ton FOB when the whole negotiations are concluded. |
