TEX reported that Japan's integrated steelmakers have negotiated their HR coil exports to South Korea at a price level of USD 700 per tonne FOB for May 2010 shipments, a price level that has already taken hold in HR coil exports out of Japan to Southeast Asia. Also, a part of negotiated prices stands at a level of USD 700 per tonne FOB for April 2010 shipments in Japanese HR coil exports to the Middle East and Latin America.
As a result, it follows that Japanese HR coil exports have taken a longer time to sell at a price level of USD 700 per tonne FOB for South Korea than for other destinations, behind which there is a major influence from China's HR coil exports to South Korea at lower prices than the Japanese counterparts. For an indicator, Chinese HR coil exports were negotiated at USD 570 to USD 580 per tonne FOB for March 2010 shipments to South Korea.
Until now, the Japanese steelmakers have firmed up monthly price terms up to May 2010 shipments in their HR coil exports to South Korea, with a price level of USD 700 per tonne FOB for May shipments, up nearly USD 100 from the settlement for March 2010 shipments. In this connection, it is understood that South Korea's steel rerollers have begun to recognize globally rising prices of HR coils in increased demand amid a considerable advance in raw materials prices. On their part, the Japanese steelmakers are contemplating seeking a higher price level that borders on USD 780 per tonne FOB in the HR coil exports they negotiate for June 2010 shipments to South Korea.
By comparison, there is information that export prices of Chinese HR coils have begun to exceed USD 700 per tonne CNF for May 2010 shipments to South Korea, CNF prices that translate into a level of USD 680 per tonne FOB or beyond. Therefore, the Japanese steelmakers believe that the prices of their HR coil exports to South Korea don't necessarily stand at a high level.
Meanwhile, in South Korea, electric steelmaker Dongbu Steel Co has raised its domestic sales price of HR coils by KRW 70,000 to KRW 750,000 per tonne from April 2010 shipments. It is likely that integrated steelmaker POSCO, too, will increase what the company charges for HR coils in April 2010 or during May 2010.