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Markups Of EG Sheets By $50 For Asia Penetrating For Apr. Shipment
Japan's negotiations on electrogalvanized (EG) steel sheets for Asia have almost crossed their peak for April shipment, and price increase of $50 from the current level has penetrated. Consequently, those prices are rising overall to around $900 FOB, and it will be the superb result as the first step because the Japanese mills are aiming at the markups of $100 to 150 during next quarter.

Price increase of EG sheets for Asia by $60 to 80 was accepted for March shipment. Most of them were $65 increase, and reached almost the level of $850. Their negotiations have been undertaken with further increase of $50 for April shipment. There is a Japanese mill which concluded its contracts for shipment of this quarter at the same prices of the previous quarter but as might be expected, the company has offered price increase of about $80 for April shipment. However, as such level of its offer prices becomes more than $850, it will be sensitive whether actual contracting prices reach such level. Orders for shipment of this quarter are said to have rushed to such mill due to the cheaper prices, and therefore, as it does not have enough capacity for new negotiations, it will not dampen negotiations of other blast furnace mills at present.

The reason why prices of EG sheets were raised is because demand for panels is strong in Taiwan. Most of the Japanese mills have had a production plan of EG sheets for this quarter remain at the same level from the previous quarter. However, actual required quantity for production exceeded planned one by 20,000 to 30,000 tons. In April, such overage is more than 10,000 tons. With this, such overage is difficult to be accepted in April shipment, and moreover there is a subtle case whether it can be accepted even in May shipment. Therefore, the situation is that negotiations naturally given priority to prices rather than quantity become possible.

In the Asian area, POSCO Malaysia raised its domestic prices of EG sheets. In dollar conversion, its domestic price for January shipment was $815, and it raised by $30 and $32 for February and March shipment respectively to the level of $870. For April shipment as well, there is a high possibility for the company to raise its price further.

Meantime, the market of cold-rolled steel sheets is showing the upward trend but it is not vivid enough. There was an exceptional case of $680 FOB below $700 in January shipment, and in February shipment as well, prices were said to be $720 to 730 FOB. Although in March shipment for Pakistan and so on, there were the cases of $850 FOB and $950 C&F, most of those prices seem still to be $720 to 760 FOB. The markets show being various, and POSCO of Korea is said not to be aggressive for export negotiations. It is hard to believe that there is an inquiry from POSCO's steel service center to the Japanese mills. It seems to be because POSCO received excessive quantity of orders from the domestic customers for this quarter, and further the periodic maintenance of its facilities of cold sheets is being made during February. The Japanese mills are observing that the surrounds are difficult for POSCO to quote cheaper prices due to appreciated won although attention is focused on its offer prices when it resumes export negotiations, and therefore, it will not affect the upward trend of cold and EG sheets.
last modified : Thu 08 Mar, 2012 [10:10]
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