Japanese HRC exporters faced a sharp price fall in June as the international market has been in the oversupply zone, as China and India have been aggressive in the export markets, and since weak demand has persisted in Southeast Asia as well as in other outlets. So, rare deals for ex-Japan HRC have been reported at much lower levels, while some mills have been reducing export allocations to a minimum.
Prices of ex-Japan SAE1006 HRC for the Asian region have been at $545-555/mt CFR, which is a big drop of $35-55/mt from the levels seen in the first week of June. However, this price drop is mainly due to the trading environment in Asia and to tough competition rather than being due to the situation in Japan. “These low levels are available only to some limited customers since automotive demand inside Japan and from some buyers overseas is good. Additionally, some periodical maintenance caused steel output cuts,” a Japanese source said.
“JFE Steel has less allocation, while Nippon will not be aggressive and will sell only to support relations with some customers,” another source said.
After the easing of geopolitical tensions in the GCC, Japanese mills have been checking possibilities of resuming trading to this destination. But price indications have been not below $600-610/mt CFR UAE, down from ex-Japan SAE1006 HRC offers at $620-630/mt CFR a month ago, but not good enough for most buyers.
“Also, many trade issues exist, making Japanese mills unwilling to export aggressively,” a trading source said, pointing to the full stoppage of the EU’s import HRC market in June ahead of the announcement of new quotas. The new quota for ex-Japan HRC in the EU is 137,885 mt per quarter, down from around 200,000 mt previously. Also, the European Commission has imposed AD duties at 30 percent for Nippon Steel and 29.8 percent for JFE and others.
