Each Japanese mills seem to have sold out galvanized iron base metals for Southeast Asia at USD 830 per tonne FOB for October shipment which was increased by USD 50 per tonne from the previous month. Each mill is ready for negotiations for November shipment and has a policy to increase its price further to the level of USD 900 per tonne FOB or above for shipment within this year.
Bid price of GI base metals for Southeast Asia was USD 770 per tonne to USD 780 per tonne FOB for September shipment as the eyes of customers still saw the lower level. Against this, as price of hot-rolled steel coils shows a sign of rise for October shipment, each user of GI base metals raised its bid price to USD 820 per tonne FOB concurrently. Inquiries are rapidly growing, and each mill proceeded with negotiations with a customer in decreasing order of higher bid price, and concluded contracts at the $830 FOB level. Every mills seem to have finalized October shipment.
The demand season of GI base metals in the Southeast Asian area comes from September. In that area, many makers are emphasizing to have used GI base metals of Japanese make as its raw material, and on top it, there are the large number of makers. As GI base metals move in tandem with price of hot coils, there is a tendency that inquiries rush to Japan when price of hot coils increases even if only slightly.
As price of hot coils shows an upward trend, each customer of GI base metals sent inquiries concurrently this time as well. The Japanese mills proceeded with negotiations reducing export quantity as well as the case of hot coils, and therefore, contract price jumped to USD 50 per tonne mark up compared with that of September shipment. The Japanese mills have mostly decided a policy to increase their prices gradually month by month, and will likely to request further price increase for November shipment as well.
At present, the reason is not unknown but POSCO of Korea seems not to have started negotiations yet. It is thought that as POSCO is undertaking price increase for the domestic, the company will not be able to balance hot coil price for the domestic with price of GI base metals for export at USD 830 per tonne FOB.
In the Southeast Asian area, there are still cheaper cold rolled steel sheets of Chinese make. However, the Chinese major mills like Baoshan Iron and Steel and Wuhan Iron and Steel increased their domestic prices of cold sheets for September shipment, and in a few days, they are foreseen to announce prices for October shipment with further increase. If so, as prices for export seem also to be raised, cheaper prices are expected to disappear. It will lead to the market price rise further.
Meantime, export negotiations on GI base metals for Middle East will likely start from next week. As inquiries are said to increase, attention is focused on price increase to what extent.
(Sourced from The TEX Report)
