Japan starts Q3 SBQ plate export deals with South Korea

Wednesday, 02 Jun 2010
TEX reported that negotiations are marking time without any disturbance so far on Japanese integrated steelmakers' export deals of ship plates with South Korean shipbuilding companies for shipments in the July to September 2010 quarter. The negotiations are on track to enter a prolonged period of one month at the end of this week after the Japanese steelmakers made offers.

The Japanese steelmakers want to get a major price increase to a new price level of USD 900 per tonne FOB in their deals this time. The Korean shipbuilding companies have yet to make any definite response, but there are signs that they are aware of a certain price increase to live with in their purchases of Japanese ship plates. As a result, it is likely that the two sides will narrow down their claims to what level of a price increase should be settled at the final stages of the negotiations.

The Korean shipbuilding companies look set to accept a certain price increase for Japanese ship supplies, given three main factors, according to market sources. First, South Korea's heavy plate suppliers such as Posco have a domestic price increase in effect of KRW 80,000 per tonne to KRW 900,000 per tonne for May shipments. Second, ship prices of late have topped USD 60 million per shipbuilding for Panamax bulk carriers. Third, the Korean shipbuilding companies find themselves in a recovery of the ship orders they take.

As market observers see it, the negotiations between the two sides are expected to face a major turning point once the Japanese steelmakers' import prices of blast furnace feed are settled for July to September 2010 shipments, settlements that would necessitate increased prices of Japanese steel exports as a whole. It is likely that the prospects will become clear at the end of May or in early June as to the Japanese steelmakers' import price negotiations on blast furnace feed for Q3 shipments.

(Sourced from TEX Report Limited)