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Japanese Mills to Offer a $20-30 Markup on GP CR for Apr Shipments
Japanese integrated steel mills are expected to begin their negotiations on general-purpose (GP) cold-rolled (CR) steel for April shipments to Asia as early as next week. Regarding GP CR steel, there have been some cases where a price adjustment (markdown) was made with March or earlier shipments. As such, the mills intend to offer an unchanged price for the customers who have endured an unchanged price, and to request a $20-30 markup to those who were benefited from the past adjustment, in order to restore the price level. The price of GP CR steel has been falling along with hot-rolled steel coil (HRC), in some cases below the major $600 mark. The mills aim to recover the price to the $600 level or above this time.

In the US, the HRC price has reportedly fallen to near-$760 and the CR steel price to near-$880. Except in the US and Mexico, the prices of CR and HRC are generally rising across the globe. Customers are expected to accelerate their purchase activities to replenish their stocks from next quarter, which coincides with a demand season. The supply side should take advantage of this golden opportunity and win a markup.

On the other hand, a negative impact of the US-China trade friction is still a cause of concern. A source close to the industry believes that the current trend towards a markup will continue, since in East Asia, the Chinese and South Korean mills are both trying to materialize a markup in their domestic markets. However, the source is still concerned that, if the mills end up with inadequate follow-through, the subsequent negative impact may linger on well into the Jul-Sep quarter.

On another note, if the price falls below the current level in the US market, the 25% tariff out of the Section 232 could apply. This would make export difficult, and exports to the US could drift to other regions, according to the source.
last modified : Fri 22 Feb, 2019 [10:47]
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