November 20, 2008

Japanese HR Coil exports to South Korea may plunge in Q4

TEX reported that there is speculation that HR coil exports out of Japan to South Korea may take a nosedive for shipments in the October to December quarter.

Japanese HR coil exports to South Korea usually total 200,000 tonne per month to 300,000 tonne per month. They totaled 1,283,828 tonnes in January to May 2008 up by 14.5% from the same period of 2007, amounting to an average 257,000 tonne per month. They could decline to an estimated 210,000 to 220,000 tonne per month in the October to December quarter, given the Japanese steelmakers' reduced export volumes then.

Japanese integrated steelmakers are expected to begin their HR coil export negotiations with South Korea's various steel rerollers in early August on October to December shipments. There are signs that the Japanese steelmakers are considering reducing what they negotiate with the Korean steel rerollers. As a result, it is likely that the Japanese steelmakers offer small price increases of USD 100 per tonne or less in their HR coil export negotiations with the Korean steel rerollers for Q4 shipments.

The Japanese steelmakers have in house conditions that require quantity adjustments in HR coil exports for Q4 shipments. One company finds it necessary to cut HR coil exports while stockpiling slabs for blast furnace repairs. Another company is set to increase slab supplies to overseas users with which the company has alliance relations, which will lead to a certain reduction in HR coil exports.

(Sourced from TEX Report Ltd)