JFE Steel Offers Plate Price Hike by FOB US$ 200/t to South Korean Shipbuilders

JFE Steel finished the price negotiations of steel plate export for South Korean shipbuilders for April-June and started next talks for July-September export. JFE Steel offered FOB US$ 900 per tonne to 2 major shipbuilders on April 27th- 28th, up by about US$ 200 from the previous quarter.

Plate market price has risen in Asia since April. POSCO, Hyundai Steel and Dongkuk Steel Mill raised the plate price by 80,000 won to 900,000 won per tonne against domestic market in May.

Plate demand is recovering. Construction machine production recovered to 70-80 % level against the recent peak in April-September 2008. The demand is expanding especially in China and India. The demand is also steady from energy industry. South Korean shipbuilding volume isn’t expected to drop largely. South Korean and Chinese plate makers expanded production capacity but their shipment doesn’t increase within April-September 2010.

Iron ore and coal prices are likely to surge more since spot prices are rising. Semi-finished steel prices of slabs, billets, and hot rolled products prices would increase, too.

South Korean shipbuilders are still in severe business conditions with few new orders. JFE Steel generally negotiates with South Korean shipbuilders on plate export every six months. However, the firm continued price negotiations for July-September. The negotiations should become even severer for July-September.