China puts pressure on Japan’s container coil
Even though global market demand for container HR coil is expected to recover somewhat in the fourth quarter,
Japan may need to rethink its pricing policy for
China.
In 2005,
China has seen exports increase while imports decrease. This means that many containers are returning to
China empty, ready to be reused for export. Consequently,
China does not need to add new containers, which may cause market demand for container HR coil from
Japan to dwindle in the fourth quarter.
Compared to common products, the market price of container HR coil will be $52/ton and $15/ton higher for wide and thin specifications. Thus, when the market price of common HR coil reaches $600/ton, that of container HR coil will reach $667/ton.
However, this kind of price mechanism may have to change somewhat. On the one hand, the price of container dropped from $2'350 per unit last spring to $1'750 per unit now. Moreover, many Chinese steel enterprises have brought wide and thin HR coil
production lines on stream as they scramble for container HR coil market share. This has led to intense market competition, and will likely prevent prices from climbing.