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| Japanese HR Coil Exports To SE Asia At Prices Beyond $600 FOB |
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Japanese integrated steelmakers have firmed up spot deals of HR coil exports to Southeast Asia at prices beyond US$600/ton FOB for March shipments. As a result, there is a possibility that the Japanese steelmakers will see bids move up to a level of US$640/ton FOB if they conduct negotiations in February on more spot deals of HR coil exports to Asian destinations for March shipments. Japanese spot deals of HR coil exports to Asian destinations are subject to an influence from what China's Baosteel charges for domestic sales of HR coils, according to market sources. Baosteel has opted to keep its domestic sales price unchanged of HR coils for February shipments despite an environment that permits a price increase. As a result, local customers are believed to have concluded that China's domestic HR coil market is unlikely to decline in the immediate future. Also, it is understood that various users in China and Southeast Asia have reacted with positive moves to purchase HR coils from without while low prices are negotiable. Their bids for Japanese HR coils have exceeded US$600/ton FOB until now. Meanwhile, the Japanese steelmakers are virtually done with their negotiations on quarterly Asian deals of HR coil exports for January-March shipments. As a result, an increased price level of US$580/ton FOB is agreed for March shipments to South Korea. Also, a similar price level goes with negotiated contracts of supplies for Southeast Asia. Therefore, the prices under contract for shipments to both destinations are close to US$600/ton FOB. The Japanese steelmakers found it possible to seek increased prices of US$600/ton FOB or beyond this time. As a matter of fact, though, they exercised moderation in their price requirements in consideration of the longtime business relations with local customers. The Japanese steelmakers explained their need to get a price level of US$650/ton FOB for HR coils under the cost burden of raw materials when they held their HR coil export negotiations with various Asian customers on October-December shipments last year as well. There are forecasts that the Asian buyers' bids will move up to a level of US$640/ton FOB if the Japanese steelmakers conduct spot deals of HR coil exports in February for March shipments at a time when transaction prices of CR sheets are bordering on US$740/ton FOB. The Japanese steelmakers have yet to start definite negotiations on contract renewals of their raw materials imports for fiscal 2010 (April 2010-March 2011). It is uncertain what price increase the Japanese steelmakers will have to live with. But there is no doubt that a considerable price increase will become the norm of contract renewals. Accordingly, it is the Japanese steelmakers' feelings that hope for setting the starting price at a highest possible level toward their negotiations on Asian deals of HR coil exports for April-June shipments. |
| last modified : Wed 27 Jan, 2010 [10:09] |
