Jaway Stainless Steel

Japanese mills request price increase to Korea for next quarter

TEX reported that although negotiations on plates and hot coils for Korea are going to end for this quarter shipment at long last, negotiations for next quarter ie July though September shipment are expected to start with the Korean customers like Hyundai Heavy Industries and Hyundai Hysco as early as from this week.

It is because as settlement for this quarter shipment became prolonged, negotiations must start in late next week to meet the production schedule of next quarter.

The projection of offering prices for next quarter shipment will start to be entertained in early next week, and the detailed one will be decided within next week. However, it will be sure that the mills will request price increase of both items for next quarter shipment too. It is very interesting how much they will request to raise those prices, and some see that request for triple digit increase is questionable and that for double-digit one is possible.

In case of this quarter, the mills requested to increase USD 300 from the previous quarter for this quarter to meet soaring prices of raw materials for steelmaking like iron ore and coking coal. As a result, USD 200 was raised in this quarter end of June from the last quarter end of March. Then, such price up seems not sufficient but to reflect price hike of raw materials to some extent. However, price increase of materials from last year when quarterly pricing of raw material started is not fully passed on to a customer. At present, as it is foreseen that higher price of material remains on the same level for next quarter, the level of raw material price will become the big factor again on negotiations.

Supply of plates and hot coils will be forecasted to become tightened in the domestic market of next quarter. As supply of hot coils for the automobile industry together with rehabilitation demand will recover more than expected, sources foresee tightness of supply. While, the reconstruction and energy related demands on plates will become high for next quarter rather than steady this quarter.

With strong demand in the domestic, there will be no need to rush into selling for export in next quarter. It is certain that the Chinese mills will move to raise prices because their profitability grows worsening. Accordingly, the Japanese mills will not be hard-pressed to increase prices rather than this quarter.

(Sourced from The TEX Report)