S. Korean shipbuilders expanding Chinese shipbuilding plate imports

SteelOrbis Shanghai The quality improvement in Chinese shipbuilding plate, medium plate and other high value-added steel products, plus the cheap price (cheaper than that of Japanese plate by about $100/mt) are leading South Korean shipbuilders to speed up negotiating with Chinese steel mills for a regular supply. During July 10-14, 2006, Samsung Heavy Industries Co. Ltd sent a representative in charge of steel purchases to negotiate with Baosteel. The company is planning to increase the imported steel quantity from 20,000 mt of last year to 100,000 mt. Another S. Korean shipbuilder, Hyundai Heavy Industries, also sent representatives to contact with Shougang and Baosteel during July 17-21, seeking to increase the imported steel quantity from 50,000 mt of last year to 450,000 mt. One other reason for S. Korean shipbuilders to increase their Chinese shipbuilding plate imports is to put more pressure on Japanese steel mills. Sources reported that, Nippon Steel initiated the negotiations with Hyundai Heavy Industries, and other S. Korean shipbuilders regarding shipbuilding plate exports on July 18. Nippon Steel hiked its quotation from the current $580/mt to $680/mt FOB, which is hard for South Korean shipbuilders to accept. Therefore, Japanese mills will have to lower their quotation in order to protect their market share from Chinese mills. China's medium plate exports to S. Korea were 202,000 mt in 2002; 104,000 mt in 2003; 271,000 mt in 2004; and 815,000 mt in 2005. In the first 6 months of 2006, the exports reached 939,000 mt.