Japan Steels Increase Hot Coil Export Price to South Korea

Japanese steel makers almost reached an agreement with South Korean re-rollers such as Hyundai Hysco to hike hot-rolled steel coil export price by US$ 5-15 per tonne for shipping in the second half of fiscal 2007 ending March 2008. Nippon Steel, Sumitomo Metal Industries and Kobe Steel raised the price by US$ 15 per tonne for 2H shipment compared with 1H while JFE Steel raised the price by US$ 5 per tonne for shipment during October-December compared with July-September. Japanese makers seem to keep shipping volume at the same level as previous period with no excess supply capacity.Hot coil demand keeps favorable mainly for manufacturing industries in Asia. The supply is likely to maintain tight for a while when POSCO, South Korean steel maker, stops operation of its hot rolling mill in Kangyang works for about 50 days due to a large refinement.Japanese integrated steels offered price hike by US$ 10-20 against South Korean re-rollers for 2H shipment compared with 1H. The re-rollers disapproved the hike due to lower market price of cold and surface treated steel sheet in South Korea.Nippon Steel restarted hot coil contracts with Union Steel, South Korean re-roller, after several years. The contract was concluded for October-December shipment along which Nippon Steel is expected to supply hot coil at 10,000 tonnes per month to Union Steel.Union Steel completed construction of a continuous pickling and rolling line at Fusan works in August 2007 and will start operation of a new continuous hot dip galvanizing line at the end of 2008. The firm plans to increase output capacity of Fusan works to 2 million tonnes per year from current 1.3 million tonnes.