Japan Major Steels to Hike Hot Coil by US$20/t for South Korea

Japanese integrated steel makers concluded the hot coil export negotiation with South Korean rerollers to increase the price by US$ 20 to around FOB US$ 520 per tonne. Nippon Steel agreed with Hyundai Hysco and Dongbu Steel for April-September shipment, which represents first half year contract, while JFE Steel will ship hot coil at the price only for April-June. A market source said Japanese export price could stabilize when Nippon Steel got higher price for the longer term. South Korean rerollers accepted higher price when hot coil supply is getting tighter in Asian market with higher price. The contract term depends on market view for future supply balance when the suppliers gain from longer term if the price would decrease while if the price would increase, the buyers gain from fixed price for longer term. The rerollers apparently expect Asian hot coil market will keep stable when they accepted the longer term supply by Nippon Steel for stable supply of high quality hot band. Other makers could follow the move to make the supply contract longer. Nippon Steel agreed with Hyundai Heavy Industries for full year plate supply contract while JFE Steel supplies plate for South Korean shipbuilder through traditional half year contract. That reflects mixed market views by Japanese steel makers.