Japanese hot rolled coil (HRC) exporters have slightly reduced their prices in April due to tighter competition from other global suppliers and mounting pressure as major markets - Europe, India, South Korea, and the US - have become less accessible because of trade barriers. With duties and exhausted quotas limiting export opportunities, Japanese suppliers are finding it increasingly difficult to place material and may be forced to offer more competitively to alternative markets to offload volumes.
More specifically, prices of ex-Japan SAE1006 HRC for the Asian region have settled at $500-510/mt CFR in late April, versus $510-520/mt CFR in late March. In Vietnam, offers for ex-Japan HRC have been voiced at around $510/mt CFR, down by $10-12/mt month on month. Although trade activity has been slow to this destination in April, several deals for ex-Japan HRC are reported to have been signed at $500-505/mt CFR in late April, down by $5-8/mt as compared to deal prices in late March.
Offers for ex-Japan HRC in Pakistan have decreased by around $15-20/mt month on month, falling to $500-505/mt CFR in late April, with at least 30,000 mt of HRC reported to have been transacted at $500/mt CFR at the end of the month. Furthermore, while offers for ex-Japan HRC in Bangladesh have been reported at around $510/mt CFR, down by $10/mt month on month, deal prices are estimated at $500/mt CFR level, according to sources.
In the meantime, offers from Japanese suppliers to the Middle East have been voiced at $505-510/mt CFR, against $510-530/mt CFR in late March. Although trade activity has been moderate in the region, current offers from Japan are considered to be “rather competitive” compared to those from India and Taiwan, with two batches of 25,000 mt and 16,000 mt of ex-Japan HRC reported to have been signed at $505/mt CFR UAE last week.
At the same time, Japanese suppliers have remained out of the European market due to trade restrictions. Notably, in March, the European Commission announced provisional AD duties on imports of HRC from Egypt, Japan, and Vietnam. These duties, ranging from 6.9 percent to 33 percent, took effect on April 7. Nippon Steel received the highest duty rate at 33 percent, while JFE Steel is subject to a 32 percent rate and Tokyo Steel to the lowest rate at 6.9 percent. Besides, in April, India officially imposed 12 percent safeguard duty on steel imports (flat steel products - HRC, CRC and coated steel), and, even though Japan has an FTA with India, the duty was applied to Japanese materials.
“Japanese HRC can’t be sold to many countries now due to trade measures, so they [mills] are under pressure to sell and are forced to reduce prices,” a market insider told SteelOrbis.