Japan Hot Coil Export Price Approaches US$ 600/t to Korean Re-rollers

Japanese integrated steel makers almost agreed with South Korean re-rollers to set the hot coil export price at FOB US$ 600 per tonne or less for January-March shipment. The export price seems to increase by US$ 30-50 from October-December to reflect supply tightness in Asia. Japanese steel makers had offered FOB US$ 600 but approved a concession in accordance with a favorable relationship with South Korean customers.

Steel sheet supply is tightening in Asia due to Chinese demand expansion. Chinese steel makers, Bao Steel, Wuhan Iron & Steel or Anshan Iron & Steel, announced price hike for steel sheet in December 2009. As a result, Chinese market price turned upward.

South Korean re-rollers were negative to approve US$ 600 when steel sheet market price hadn’t risen enough in South Korea. However, the re-rollers finally accepted the hike for stable hot coil procurement. Hyundai Motor or LG Electronics are in steady operations. Meanwhile, Korean steel makers, POSCO, Hyundai Steel and Dong Bu Steel, cannot supply high grade products enough such as high-tensile hot coil. The re-rollers need to purchase the coils from Japan.