Japan Major Steels to Hike Sheet Export by US$ 30-50/t for October-December

Japanese integrated steel makers started last week sheet steel export price negotiation for October-December. The makers talk with the buyers raw materials cost for October-December at first. The makers try to increase the price by US$ 30-50 per tonne for October from September shipment to improve the profitability under higher yen rate. The steel makers try to rebuild the pricing when the buyers show better appetite since mid-July after they held the order since June due to Chinese lower steel price.

Asian sheet steel price started to decrease since May due to adjustment in Chinese market. Japanese steel makers’ export transaction got severer month to month for July-September. The price decreased to less than US$ 700 per tonne for hot rolled coil, less than US$ 800 for cold rolled flat steel and less than US$ 900 for electrogalvanizing steel for August and September shipment. The price is more than US$ 100 lower than the recent peak.

Chinese raw steel output decreased in June and July under lower steel price. The steel export decreased to less than 5 million tonnes per month due to termination of export tax rebate for some steel items. Chinese government tries to adjust the action to prevent Chinese steel industry from depending on heavy export.

With the lower production, Asian sheet steel price showed sign to hit bottom in late July. Chinese major steel makers increased domestic steel selling price for some items for September. Japanese steel makers get higher order for middle and high grade products when the inventory was adjusted in Southeast Asia. Potential lower steel export from South Korea could improve the Asian supply balance under higher won exchange rate while South Korean steel makers expanded the output capacity.

Iron ore spot market price recovered near C&F US$ 150 per tonne level to China recently while the price decreased to less than US$ 120 in mid-July. Japanese integrated steel makers’ quarterly iron ore price could keep relative high level for October-December while the price could be lower than July-September. Japanese steel makers try to improve the profitability through the export price hike under 15-year high yen exchange rate against US dollar.

The price increase attempt could be severe under uncertain export market when Chinese raw steel production increases in daily base and the steel inventory increases.