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TEX update on negotiations on Japanese wire rods for June shipment

By The TEX Report , 2014-05-05 12:00:00

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Negotiations on blast furnace steel wire rods for Asia seem to have passed the peak for June shipment at levelling off of prices from May shipment. Within the month, all negotiations are expected to end.

Most of customers accepted an increase in prices by around USD 10 for April and May shipment. For other customers, prices were increased by USD 10 for June shipment. As a consequence, a slight increase in prices by USD 10 is to have been accepted in this quarter.

After the consecutive holidays in May, from the middle of June, negotiations will be commenced for shipment of the next quarter, and the Japanese blast furnace mills of wire rods have a policy to raise their prices ongoingly by offering a slight price increase for July shipment as well considering the tightened balance of supply and demand centering demand for automobiles.

Demand for automobiles was brisk in negotiations for June shipment in China, Indonesia and so on except Thailand. In Korea as well, demand is said to be steady. In case of Japan, as the domestic production plan of automobiles has been revised upward, production of some blast furnace mill was reduced due to revamping of facilities and equipment and so on, the mill was forced to select orders on wire rods for steel cords to be used for tires.

In China, the major mills of Wuhan Iron & steel and Anshan Iron & Steel starting with Baoshan Iron & Steel (Baosteel) left their domestic prices of wire rods unchanged for May shipment. Baosteel cut its prices of steel sheets and coils but left those of wire rods unchanged. And also, Taiwan's CSC revealed to leave its domestic prices of wire rods for June shipment.

Korea's POSCO is said to have raised its domestic prices and to have made forced aggressive sale. And, the company's cheap prices for export were not found. The top management of that company is said to have set out a focus on profitability, of which effect is appearing in the export market.

Although supply of wire rods is tightened in Asia, an increase in prices is difficult the same as other steel products. It is because Chinese products have been put on the market. As a result that the USA determined to be affirmative on the antidumping case, 600,000 tonnes a year were shut out and have been circulated to Asia especially to Japan. In near future, Indonesia's safeguard on wire rods is implemented.

On Japanese products, as the plaintiff exempted those for automobiles, 80% of them are not to suffer a damage. However, there is a possibility for Chinese products to be shut out. If so, a feeling of excess in supply becomes strong further. For the next quarter as well, the Japanese mills are likely to face difficulties.

 

 

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