Japan Integrated Steels Get Korean Shipbuilding Plate Hike for Jul-Sep

Japanese integrated steel makers and South Korean shipbuilders seem to have agreed in steel plate price hike for July-September export. The price negotiations took a long time since shipbuilders were unwilling to approve plate hike. The hike range is unrevealed but both steel makers and shipbuilders seem to have reached an agreeable point.

Japanese integrated steels initially offered US$ 900 per tonne for July-September export to South Korean shipbuilders, higher by around US$ 200 than the export price at the end of June. The shipbuilders showed disapprovals against the hike range. POSCO of South Korea sells steel plate at around 950,000 won (approximately US$ 808) per tonne. Japanese offer price was higher than POSCO’s price.

South Korean shipbuilders’ new order receipts have gradually recovered since the significant drop in 2009. Meanwhile, their profitability has worsened due to different order mix for ship types. The shipbuilders are unwilling to accept material cost up with a concern on severe business conditions.

At the same time, South Korean shipbuilders seem to have intentions to keep material supply from Japanese integrated steel makers. Several new supply sources currently exist such as import of cheaper Chinese materials and output capacity expansions by South Korean steel makers. However, the shipbuilders expect for stable quality and volume served by Japanese integrated steels.

Japanese integrated steels and South Korean shipbuilders seem to have reached price hike agreement eyeing coming negotiations for and after October-December.