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Japan's JFE eyes furthers increases in HRC export prices - 11 January 2012

Following its recent increase in export offers of hot rolled coil, Japan’s JFE Steel is eyeing an additional $50/tonne hike for shipments starting late-February. This is designed to ensure a steady recovery to profitability, a company spokesman tells Steel Business Briefing.

For January shipments, JFE sought a $30-50/t increase in offer prices over the previous quarter. Customers in Asia and elsewhere have accepted the hike partially –about $10-15/t – for late-January shipments and are warming up to an additional $10-15/t rise for early-February shipments.

“We will try to lift prices by another $50/t for shipments after March. The current price level is not adequate,” the spokesman says. This hike, if implemented, would lift prices by a total of $70-80/t from October-December levels. JFE is also trimming export volumes by 15-20% quarter-on-quarter for January-March shipments hoping tighter supplies would support higher prices.

Though JFE does not reveal its export prices, a Tokyo-based trader says Japanese export prices for SPHC-grade HRC would average $630/t fob for Asian markets but warns that a $50/t increase would be difficult to achieve. “Demand is only just recovering but is not strong enough to support higher prices,” he reasons. “Prices could remain at $630/t fob even after March,” he expects.

Meanwhile, negotiations between Japanese mills and major Korean re-rollers for January-March shipments have reached a deadlock. For October-December, Japanese blast furnaces had commanded an export price of $750/t fob to Korea but this price was much higher than Japanese export prices to other countries, another Tokyo-based trader notes. “But Japanese mills can’t afford to drop export prices to Korea as they could attract antidumping charges,” he says.


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