Japan Hot Coil Export Price to Hit US$ 500/t to South Korea

Japanese integrated steel makers are expected to conclude hot rolled coil export price negotiation with South Korean rerollers at around FOB US$ 500 per tonne for July-September shipment. A part of the negotiations apparently reached the agreement. The price improvement is clear when the indicative export price increases by around US$ 100 while the export price decreased to around US$ 400 under slump in Asia since late 2008.

The export price hit record US$ 1,000 per tonne for South Korean rerollers in last summer. The demand plunged in late 2008 due to worldwide recession. Some South Korean rerollers stopped the hot coil purchase part of the month in January-March to reduce the inventory and the export decreased significantly. The export price decreased sharply and POSCO considered antidumping filling against Japanese steel makers.

The demand improved since mid-May when the rerollers finished inventory adjustment and the users’ activity improved in South Korea and Asian market. Asian steel market rebounded mainly in China. Japanese integrated steel makers offered more than US$ 100 per tonne of hike for July-September shipment to improve the profitability.

South Korean rerollers resisted to the wide hike to secure profitability while their selling price improves for cold rolled and coated products. However, the buyers finally accepted the hike to secure materials through long term relationship with Japanese steel makers when Chinese makers increase the export price to South Korea. Japanese steel makers would reduce the export volume to avoid antidumping case.