Asian Makers Offer Lower Price to Japan Buyers

Steel makers and exporters in South Korea and Taiwan accelerate to export to Japanese buyers. Higher priced Japanese market attracts their interests when Asian market decreases to US$ 450-500 per tonne for hot rolled coil. Lower won rate also improves Korean makers’ competitiveness when the won rate decreases to 1,560 won per US dollar and 1,600 won per 100 yen.

Japanese sheet steel is oversupply when the stock of hot, cold and coated sheet hit 4.729 million tonnes at end of January. Japanese buyers’ are reluctant to import. However, Japanese steel industry is cautious for potential higher import when Chinese, South Korean and Japanese steel makers’ competition heats up between in Southeast Asia.

Japanese dealers’ sources said the offer to Japan is around 65,000 yen per tonne for hot coil from Taiwan and South Korea and some offer is as low as less than 60,000 yen. The offer is less than 70,000 yen for cold coil and around 80,000 yen for hot based electro-galvanizing steel. The offer level is 30,000 yen or more lower than the peak in 2008.

Asian market price is around US$ 500 per tonne in China and Taiwan ant less than US$ 500 in Southeast Asia. Chinese buyers apparently get more offers from Russia and USA. World steel makers try to increase export to cover lower domestic demand due to slower economy after financial crisis.

Japanese steel users and dealers are reluctant to import when they try to reduce the overstock. The hot, cold and coated sheet steel import decreased by 39.5% in January from December. However, some buyers consider potential import from cheaper sources depending on the inventory adjustment status.