Nippon Steel to Hike Hot Coil for Korean Rerollers by US$ 200/t

Nippon Steel almost completed price hike negotiation with South Korean rerollers to increase the hot rolled coil export price by US$ 200 per tonne for June shipment compared with October-March period. The firm increases the hot band price from FOB US$ 720 for April shipment to US$ 750 for June when the rerollers are suffered from higher cost price and lower selling price. After the settlement with South Korean rerollers, Nippon Steel starts price negotiation with other Asian hot coil buyers offering FOB US$ 800.

Nippon Steel offered FOB US$ 750 per tonne, which is US$ 200 higher than current price, to reflect higher offshore market level. However, the rerollers resisted the wide hike when they cannot make money with lower South Korean market for cold rolled and galvanizing steel.

However, international hot coil market accelerated to increase recently when the makers try to increase the selling price aggressively to cover higher cost under strong demand for manufacturers in Asia and higher raw materials cost including 65% higher iron ore price for fiscal 2008. Nippon Steel succeeded to get contract of hot band for South Korean steel pipe makers at FOB US$ 780 per tonne for April-June. South Korean rerollers finally accepted the higher price.

Nippon Steel revised the contract term again from half year base to quarterly base under uncertain foreign exchange rate. The hot coil export volume to South Korean rerollers is expected to decrease for April-June from now.