There is no sign of progress even till mid-December in negotiations on steel plates for shipbuilding for Korea for shipment of this quarter (October to December), and if this goes on, negotiations are likely to see the old year out. Although the shipbuilders are reducing a extent of price down in their bid prices, still, there is a substantial difference between their target prices and the price level of the Japanese mills which are insisting on leveling off.
In the backdrop of negotiations being not progressing, there is the fact that negotiations between POSCO and the shipbuilders in Korea are not visible externally. Such information is flowing that POSCO raised its prices of general use plates by KRW 20,000 (USD 18). The company had continued to decrease its prices in order to counter imported products but it is seen to have carried out increase in domestic prices of plates for general use with price rise of the Chinese products.
As not only POSCO but also other plate mills are very difficult to cut their prices any more as would be expected, they are going to undertake price recovery. Baoshan Iron & Steel of China noticed to raise its domestic prices of plates by CNY 50 to 100 (USD 8 to 16) for January shipment. The mills begin to move concretely toward bottoming out and rebounding of plate prices. As a customer side possibly sees present prices to be a bottom and has accepted price increase of general use plates by USD 20 to USD 40, the market prices have risen.
The situation of shipbuilding plates is still tough. The Korean shipbuilders are to reduce quantity demanded of plates by 20 to 30% in 2013 from that in this year. Such substantial quantity decrease affects largely the Korean plate mills as well. However, the plate mills of Japan and Korea are recognizing to be hard to secure quantity even if they cut their prices.
Under the circumstances, the plates mills of both Korea and Japan are showing reluctance against requirement of price down by a shipbuilder side, and the situation is stalemated. However, for the Japanese mills, prices in dollar are expected to rise due to appreciated won at present. The Japanese mills seem not to have the intent to proceed with negotiations hastily in order to watch negotiations between POSCO and the shipbuilders, the Chinese mills' negotiations for January shipment, the movements of the won, and so on.
