TEX reported that each customer's wait and see attitude against negotiations on hot rolled steel coils for the remote area like Middle East has continued, and the market is still quiet. Partly for the reason that Ramadan has been in observance in Middle East, any one is said to show no sign of taking action even if a tender for public works in Saudi Arabia is likely to be invited.

Price of hot coils in that area seems to be fixed at around USD 270 to USD 730 CNF. However, USD 700 CNF offered by Russia and so on is reported to have disappeared. The cheapest price faded out because the market remains unchanged, sale is not expected even if price is reduced further, and a mill side reached critical limit to cut its price.

Purchase quantity by customers in Middle East before Ramadan was not so large, and therefore, lack of inventory is likely to happen after Ramadan. However, they maybe think to be able to make spot purchase, and purchase for September shipment as well is reported not to be active. As there are sovereign risks among USA and European countries, it is said to be indications that they are observing price of hot coils will not rise. It is reported that in the Southwest Asia other than Middle East, the issue of compulsory specifications comes out, and therefore, it will be necessary to watch the situation as the non tariff barriers are occurring.

As there are compulsory specifications among the Asian countries, and moreover, concern about issues like safeguard and antidumping is generated, there is no movement on business negotiations in this area as well.

In the USA market, price of hot coils dropped in the second week of August as well, and it decreased by USD 80 or so in August till now. As price decrease of hot coils In June was by USD 40 or so, it was to have expanded to double. That price level is USD 730 or so per net ton dipping below USD 750. As the AD duties were lifted in this year, USA is the potent market for Japan but price has become far from the attractive level.

At present, there is no area for the Japanese mills to make export negotiations with. At present, any supportive factor to proceed with negotiations cannot be found. Export negotiations for remote areas have to start as early as late this month from its time schedule for next quarter shipment but attention is focused whether the Japanese mills are ready to offer till then.

(Sourced from TEX Report Limited)