Japan Hot Coil Price to Keep Over US$ 500 to South Korean Re-rollers

Japanese integrated steel makers and South Korean major re-rollers reached a basic agreement on the price negotiation for hot-rolled steel coil for January-March shipment. The price seemed to keep flat at FOB US$ 500-510 from October-December 2006. The price maintained at over FOB US$ 500 when Asian hot coil market recently keeps steady, though South Korean re-rollers sought the price down in the early negotiation.Asian hot coil market maintains stable when the supply and demand are balanced. Bao Steel in China and China Steel in Taiwan also set their selling prices unchanged for the domestic users.Japanese makers offered to set their selling prices flat from October-November 2006 when the market price is stable and the supply is tightening. On the other hand, South Korean re-rollers sought the price down because they are suffered from lower profitability due to the delay of price hike for cold-rolled steel coil and galvanized steel coil. However, they postponed long-term relationship and came to an agreement.South Korean re-rollers continue high production and seem to request Japanese makers to increase hot coil supply volume. Japanese steel makers barely have excess supply capacity of hot coil when the demand is increasing for automobile. Japanese maker source said their supply volume would be the same level in January-March 2007 from October-December 2006.