Japan Steels to Offer US$ 40-50/t Hike for Shipbuilding Plate to South Korea

Japanese integrated steel makers will offer US$ 40-50 per tonne of hike for shipbuilding steel plate for South Korean shipbuilders for April-September shipment under tight supply. They will start the negotiation as early as next week. The export price is around FOB US$ 610 per tonne for October-March shipment. The negotiation between steels and shipbuilders took more than 2 months with strong resistance by South Korean shipbuilders. South Korean shipbuilding plate demand is annual 6 million tonnes. The shipbuilders purchase around 1.5 million tonnes from Japanese steel including Nippon Steel, JFE Steel and Sumitomo Metal Industries. The steels are likely to minimize the price hike under long term relationship with the shipbuilders, which are major stable buyers with large volume. Worldwide shipbuilding volume was expected to exceed 50 million gross ton in 2006 under growing maritime transport demand. With the strong demand, South Korean shipbuilders will keep high level activity after 2007. South Korean shipbuilders invest aggressively to meet higher demand increasing plate purchase volume. However, shipbuilders are likely to resist the plate price hike under higher cost for materials other than steel including nonferrous metals.