POSCO to export CRGO electrical sheet at lower prices
Monday, 03 Aug 2009
It is reported that POSCO has embarked on its exports of grain oriented electrical sheets at low prices, mainly for shipments to Asian destinations. The company's offer prices on FOB terms are seen as lower by nearly USD 1,000 per tonne than what Japan's integrated steelmakers charge for their exports of GO electrical sheets.
It is understood that POSCO's export offensive for GO electrical sheets stems from the need to expand outlets in enlarged production capacity. Until now, the company has reinforced its production capacity of GO electrical sheets by 80,000 tonnes per annum to 250,000 tonnes per annum.
It is unlikely that Japan's exports of GO electrical sheets will come under an immediate influence from POSCO's low priced exports because Japanese integrated steelmakers usually negotiate annual or semiannual export contracts of GO electrical sheets.
The Japanese steelmakers are on track to negotiate for export contract renewals of GO electrical sheets in and after October this year. In this connection, there are few prospects of POSCO entering the field of premium GO electrical sheets in which the Japanese steelmakers boast their strong point. As to medium and low grades, though, the Japanese steelmakers could face cases of competing with POSCO's exports at low prices. Therefore, it is considered certain that the Japanese steelmakers will face various customers' requests for a certain price reduction in supplies of medium and low grade GO electrical sheets.
As matters now stand, the Japanese steelmakers are concerned about how long POSCO will continue its low priced exports of GO electrical sheets.
In this connection, there was speculation that South Korean GO electrical sheets, too, may become a subject of the Chinese AD investigation. Actually, however, the Chinese government has excluded the Korean products from its AD investigation. The Chinese government is believed to have favored a solution to the steel trade dispute in point via a Sino Korean steel industry dialogue.
