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JFES To Offer Hot Coil Prices For Asia With $50 Markups For May Shipment
JFE Steel (JFES) will proceed with negotiations on hot-rolled steel coils for Asia for May shipment from next week, and is to offer markups of $50 this time as well.

JFES secured markups of $30 to 40 for shipment of January/February this year, and realized price increase of $30 against offering markups of $50. Furthermore, the company succeeded in price increase of $20 eventually against requiring $50 markups for April shipment as well. As a result, most of its prices of hot coils for Asia seem to become $700 CFR.

As even $700 CFR is not profitable, the company intends to raise its prices for May shipment as well with markups of $50. This makes its goal $750 CFR. This price level is similar to prices of hot coils for Asia at the point of October last year. If all goes well, it is to recover the level of last year in May shipment at long last. In case of last year, the company intended to undertake negotiations aiming at $850 CFR for shipment of the latter half of the year starting from $700 CFR. However, as the market prices collapsed largely, its intention could not be realized. In the case of this time, after the company achieves increase of $750 CFR, it is to aim at $850 CFR. With this, JFES has a plan to reduce export quantity of hot coils by 15% for May shipment as well from normal export quantity sticking to a price-oriented stance.

With respect to negotiations on hot coils for Asia, the Russian mills of which attitude had been said to be a destabilizing factor till now seem also to raise their prices. The Russian mills had proceeded with negotiations at $630 to 650 CFR. They were likely to get orders at cheaper prices because expected quantity for January shipment could not be filled, and seem to have been negotiating at $680 CFR of $30 markups after absorbing such cheaper orders. As this price level is equivalent to the level of $700 CFR of the Japanese mills in which quality advantage is included, the Russian mills are becoming to be unable to say to have been negotiating at cheaper prices.

POSCO of Korea is still inactive in the Asian area. It seems that as the company got excess orders for the quarter of January through March, it is reducing export quantity. The movement of the Chinese mills is not certain but there is information for them to have offered around $680 CFR for Korea and so on, and nevertheless, quantity to be offered seems to be small.

Anyhow, each mill of each country is moving to raise its prices. JFES is to start negotiations for May shipment, and to propose $50 markups in ways that the company leads the upward trend.
last modified : Thu 22 Mar, 2012 [10:31]
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