Japan Major Steels to Get US$60-80/t Higher Price for Sheet Export to Asia

Japanese integrated steel makers are concluding sheet steel contract export negotiation with users of Asian transplants of Japanese appliances makers for shipment in second half of fiscal 2009 ending March 2010. The negotiation was deadlock since late August due to strong resistance for higher price by the buyers under higher Asian market price since May and lower Chinese market price since August. Some office automation equipment makers show sign to intention to accept certain price hike to secure the material stably under recovering production. The price is likely to increase by US$ 60-80 per tonne from the first half level.

The steel makers seek around US$ 100 per tonne of hike for the buyers for the second half shipment to improve the profitability by increasing the price level after plunge after Lehman Shock in late 2008. The steel makers are confident to get higher price when Baoshan Iron and Steel increased the erctrogalvanized steel price by more than US$ 200 per tonne for July-September.

Japanese office automation equipment makers resisted to the higher steel price when they try to reduce the production cost under lower operation rate. They recognized steel price decreased in China since late August.

However, the transplants in China and Vietnam increase the production level recently while supply of electrogalvanized steel is tight due to higher demand in China under stimulus package for appliances. The supply for high grade products, for which suppliers are limited to Japanese makers and some competitors, is very tight. Under the severe supply condition, the buyers started to accept the higher price.