TEX reported that prices of hot rolled steel coils for January shipment rose further in the Asian region.The Japanese mills are predicted to raise their prices in negotiations on HR coils for February shipment as well taking an advantage of such situation.
The mills have not fixed their prices but JFE Steel that will commence its negotiations soon seems to target USD 50 increase from the current prices according to an impression.
HR coil prices in the Asian region were mostly settled at USD 10 increase in negotiations for shipment of the first half of January.While,in negotiations for shipment of the second half of January,those prices were raised further by USD 15 to 20.
Demand for HR coils has not changed substantially in the Asian region.While,the big change is that the number of suppliers to export decreased.The Russian mills which had embarked on an export drive before cannot be found.Usually in winter time,the Russian mills suspend export due to the seasonal factor.They are quiet this time too as usual.
And,the Chinese mills are not prominent.As the Chinese domestic prices of HR coils are rising,the mills might see for their domestic supply to be profitable rather than export.According to the China Iron&Steel Association,the domestic price of HR coils in the previous week was 4,008 CNY on average.In dollar conversion,it is USD 636 including tax.In the middle of October,it was 3,841 CNY or USD 609 ditto.
At present,the export prices of HR coils in Asia are around USD 570 to 580 FOB.The export market prices are higher than domestic prices excluding tax but as the Chinese mills are questionable to secure this level for export,they are thought to have judged for domestic supply to be relatively advantageous.Accordingly,export by the Chinese mills has not been highlighted much.
Out of the Korean mills,a report of negotiations is not heard other than Hyundai Steel that is proceeding with negotiations in Vietnam,Indonesia and so on.Information on POSCO is less than that,and the company seems not to supply its products to other customers than its subsidiaries(in Vietnam,the USA and so on).
Under the circumstances,the Japanese mills are likely to become main negotiators for February shipment.It will be good opportunity for them to recover their profitability of HR coils with the window of depreciated yen.It will be sure for the Japanese mills to offer price increase in February shipment following January shipment.However,there seem no mills to have decided their markups yet.JFES that is going to commence negotiations for February shipment soon has also not decided a markup yet.But,as a feeling,the company is likely to set it by USD 50 increase from the current prices.If this level is accepted,the company will achieve its goal in next quarter to exceed USD 600 FOB in February shipment,and its prices is foreseen to reach USD 630 FOB or so.
Meantime,the Japanese mills'negotiations on HR coils for Korea seem to go into full swing for January shipment from now on.It is reported that POSCO has a policy to raise its domestic prices by KRW 30,000 to KRW 50,000(USD 28 to 47).The Japanese mills seem to proceed with negotiations watching such movement.
