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Bids For Next Qtr Shipment Are All Present In Negotiations On Shipbuilding Plates For Korea
In negotiations on steel plates for shipbuilding for Korea, the Japanese mills begin eventually to be receiving bids from the shipbuilders. The Japanese mills had offered mostly markups of $50 compared with prices for this quarter. Against this, the shipbuilders had requested, in contrast, price down by more than $50. As direction of both parties does not meet, it seems to take so long time for negotiations of this time to be concluded.

Prices of plates except for shipbuilding are rising in each Asian area. Seen from a contract base, prices were increased by $30 to 40 for April shipment from March shipment. The Korean plate mills are also said to have offered markups of 3,000 yen ($36) for Japan. Prices of flat products like steel slabs and hot-rolled steel coils are generally going up, and in respond to this, prices of plates for general use are also recovering.

On the contrary, the environment of negotiations on shipbuilding quality plates for Korea is severe. Contract quantity of vessels for export is largely decreasing, which is said to be crucial to the survival of small and medium sized shipbuilders. With this, consumption quantity of shipbuilding plates in Korea is believed to decrease by 1 to 2 million tons this year from the usual case. As decrease in quantity is very large, the environment is becoming severe for not only the shipbuilders but also the suppliers of Japanese and Korean plate mills.

As the mills are proceeding with negotiations under such circumstances, it can be said to be the difficult situation for them to win price increase like for general use plates. However, it is the real situation that the Japanese and also Korea mills have already reached their limit of price down for the shipbuilders. Therefore, if price increase is impossible, they have no choice to aim at maintaining their prices at the same level. But it is subtle whether the surroundings allow this.

In order to survive in the Korean shipbuilding industry, all of the plates mills are forced to insist on keeping their prices the same but as soon as anyone of them moves to secure quantity, there is a risk of collapsed prices. Under the information that the Chinese mills made contracts dipped below $700 FOB, attention is drawn to see how each plate mill will be able to persevere to what extent.
last modified : Tue 03 Apr, 2012 [10:38]
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