Japanese HRC exporters have managed to increase prices significantly in December owing to a visible shortage of re-rolling grade coils in Asia, strong demand in the local market, high realizations in the EU and US and, as a result, limited allocation from major mills. Japanese suppliers are targeting higher prices even despite the recent decline in local prices in China and weaker bids from Vietnam as higher quality re-rolling grade HRC is in demand in Asia and beyond.
Major producer NSSMC is targeting $800/mt CFR in the Southeast Asian market and, though this level has been too high for Vietnamese customers, according to sources, some volume has already been booked to Indonesia at this level. The latest deal for Japanese coils to Vietnam was reported at $750/mt CFR more than a week ago.
“It looks like the price trend is still stable or increasing,” a Japanese trader said, adding that good demand from overseas and local customers for re-rolling grade HRC from Japan is offsetting the impact from the fall seen in China in late December.
Moreover, Japanese coils have been traded in the EU at above $800/mt CFR recently, at $810-820/mt CFR approximately, sources confirmed. Japanese exporters have also been targeting sales of coils to the US market, where price realisations were higher than elsewhere earlier this month, while “there are no fresh prices to the US at the moment,” according to a seller.
As a result, the latest sales to Asia and Europe from Japan translate to $770-780/mt FOB, while some earlier transactions in December were done at $730/mt FOB. This means that prices have surged by $160-170/mt in the latest contracts, compared with the price levels a month ago.