Negotiations on electro-galvanized steel sheets for Asia have started for shipment of February next year. The Japanese mills seem to have mostly offered USD 30 increase.
It is said that Korea's POSCO reduced its prices to USD 730 to 750 CFR for December shipment from USD 740 to 760 CFR for November shipment, and concluded contracts with no fluctuation from the previous month for January shipment. It is reported that the company is under study to raise them to USD 760 to 770 CFR for February shipment. The company is in direction to raise its prices by USD 20 to 30 same as the Japanese mills.
There is a big difference in negotiations for February shipment between this year and last year. One is the demand aspect. In case of last year, it was in less demand and a downward trend of prices. While, this year, it is widely thought that in China, the economic policy to invest 1 trillion CNY already released is expected to be carried out on a full scale after the Chinese New Year, and therefore, purchase at a bottom price begins to have come out from customers. The lower prices of cold rolled steel sheets already rose by USD 40, and even the higher prices did by USD 10 to 20.
As prices of EG sheets bottomed out in December shipment which was confirmed in January shipment, they are in a mood of price rise in February shipment following CR sheets. In China, as Baoshan Iron & Steel noticed to leave its prices of EG sheets unchanged for November shipment, the market prices of EG sheets have not dropped like CR sheets.
Second is appreciation of currencies of each country. The Korean won appreciated by about 10%. Responding to this, POSCO and the re-rolling mills are forced to raise their export prices, and price increase by more than USD 20 is expected in February shipment. In Taiwan as well, the new Taiwan dollar is recently appreciating to 29 from 30 to the US dollar. CSC left its domestic and export prices unchanged for January/February shipment but the company is seen to change its prices for March shipment which will be noticed in January.
Third is that the Chinese mills mostly recorded deficit and will be difficult to decrease their prices any more. In particular, as prices of hot-rolled steel coils are rising by more than USD 30, each re-rolling mill might face a matter of surviving without price hike of EG sheets. As after the Chinese New Year, demand is expected to increase, there is a strong possibility that not only the blast furnace mills but also the re-rolling mills will set out price increase of EG sheets.
Under the circumstances, the Japanese mills are in a stance to offer price increase by USD 30 first on a full scale for February shipment and to continue to ask for further increase for March shipment as well.