Negotiations on hot rolled steel coils for Korea seem to have started for March shipment. The Chinese and Taiwanese mills are said to have offered their prices before and after the Chinese New Year which seem to be raised by about USD 30 from contracted prices for February shipment to USD 680 C&F.

The Japanese mills are proceeding with negotiations but have not offered their prices yet. However they are to raise their prices for March shipment as much as possible to place it to put an end toward new fiscal year and to request price increase same as the mills of other countries.

At present, requests to advance contracted shipment of February from Korea have been consistently received by the Japanese mills. It is because there are less inventories owned by customers and even if they place orders to POSCO, Hyundai Steel and so on sooner delivery cannot be expected.

Within Korea, competition among the blast furnace mills increased in the latter half of last year. As a result, in the Q4 as they received orders in large excess, substantial quantities are said to have been carried over to this quarter. With this they are said to be unable to accept orders with immediate delivery. Orders for export also are the same and POSCO, Hyundai Steel and so on seem to have not resumed negotiations for export yet.

As the Korean mills are unable to have handled domestic orders, customers are to request advanced shipment against the Japanese mills and the situation can be said to the tightened supply position for the time being.

Possibly for this reason, the Taiwanese and then Chinese mills are said to have offered their markups. The Korean mills also seem to increase virtually their domestic prices of hot coils by reducing the range of discount. The discount range of Hyundai Steel is said to be KPW 50,000. POSCO's movement is still unclear. The current domestic prices of hot coils are said to be the low KPW 700,000's. Their goal seems to raise their prices to nearly KPW 800,000 as much as possible.

The Japanese mills seem to be thinking to make a trend to be able to request hot coils prices of more than USD 750 C&F from April onward. For this reason they are thinking to have their prices reach USD 700 C&F in March shipment as much as possible. If the Korean mills will succeed in virtual increase of their domestic prices, price increase by the Japanese mills will also penetrate into the market.

(Sourced from Tex Report)