High Yen Rate, Thai Flood to Cut Japan Steel Export

Japanese steel export is likely to decrease more. The export decreased for 6 months in a row in year to year basis to total around 3.5 million tonnes in August. Japanese integrated steel makers cannot increase export order receipt when lower international steel price, historical high yen rate and lower liquidation of users in emerging countries along with Thai flood damage. An integrated steel source expects the export could be less than 3 million tonnes per month in October-December.

Economy growth slows in China and Southeast Asian countries under European financial crisis while Asian steel market is oversupply mainly due to higher production in China and South Korea. Asian steel price decreased to less than C&F US$ 700 per tonne for hot rolled coil and to around US$ 700 for plate.

Japanese major steel makers try to keep the export price level under still high raw materials cost in October-December. However, the makers cannot increase the export order at historical high yen rate. Some trading companies increase steel purchase from third parties instead of high priced Japanese steel to meet offshore buyers’ requirement.

Thai transplants of Japanese automakers stop all of the operations due to flood. The plants try to secure alternative parts to resume the operation next week. A trading firm source expects Thai economy could take more than one month to resume normal activity when parts makers have to repair flooded facilities.