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| HOME >> Topics List >> April, 2010 >> 27 (Tue) |
| Japanese Steel Export Talks On Q3 Asian Deals |
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Japan's integrated steelmakers are expected to start negotiations in mid-May on their deals of various steel exports to the rest of Asia for shipments in the July-September quarter. Indications are that they will finalize what price increases to offer right after the nation's consecutive holidays in early May. There are forecasts that they will seek price increases of around US$100/ton again as they need passalongs to meet increased prices of their raw materials imports, thereby affecting the business relations with various customers. It is considered certain that the Japanese steelmakers will face an increase in what they pay for imports of raw materials such as iron ore and coking coal in the July-September quarter as well. As a result, the environment requires the Japanese steelmakers to offer price increases in negotiations on various steel exports to Asian destinations for July-September shipments in uncertain prospects of how the new import prices of raw materials will come out. Still, the Japanese steelmakers find it possible to anticipate what price increase the world's major raw materials suppliers will seek in the July-September quarter, given spot prices of raw materials. Under the present circumstances, another considerable price increase of close to US$100/ton can be forecast for the world's raw materials then, according to Japanese steel industry sources. Chances are the Japanese steelmakers will have to negotiate for substantial price increases in Asian deals of various steel exports for July-September shipments. Those price increases will represent ones to forestall increased prices of raw materials imports in the July-September quarter and to complement the price increases settled in various steel exports for the April-June quarter. Accordingly, there is a possibility that what the Japanese steelmakers' new price increases in their steel exports will differ in scale and from customer to customer. If the Japanese steelmakers seek major price increases again, various customers in Asian destinations are expected to react with strong resistance. But there are signs that the Japanese steelmakers are ready to meet tough price negotiations because they will face a matter of life or death unless they get an adequate pass-though in what they export. In South Korea, meanwhile, Hyundai Steel Co and Dongkuk Steel Mill Co have stopped their supplies of rebars to major construction companies since the beginning of April, according to information made available in Tokyo. The two steelmakers executed a price increase of rebars each by W50,000/ton (US$45) in February and April, a cumulative price increase of W100,000/ton (US$90). But the construction companies rejected the two price increases of rebars and stopped their payments from February onward. It is understood that the two steelmakers had to price up rebars in a surge of ferrous scrap prices. Similar cases of a payment rejection and a steel supply stoppage could occur in Japan from the July-September onward, market observers suggest. As a matter of fact, steel export shipments out of Japanese steelworks to a Japanese-affiliated user abroad stopped for a short period late last year in the wake of pricing difficulties. At the time, the offered price increase was rejected, leading to the absence of a new supply contract. |
| last modified : Thu 06 May, 2010 [10:07] |
