Japanese HRC suppliers have managed to increase prices significantly in sales to major trading destinations in Asia and the Middle East. Moreover, taking into account limited allocation and the overall still bullish outlook in the market, exporters are aiming to increase prices further by up to $50/mt, though this will be hardly achieved without strong support from buyers in Asia.
Japanese exporters managed to close a number of deals for October shipment at $485-490/mt CFR to Pakistan and Vietnam two weeks ago. The latest deal to Asia was already done at $500/mt CFR early last week, sources have said, and “it was too cheap in current conditions and the deal was done easily,” a source said.
This means that ex-Japan deal prices have increased by $40-45/mt over the past month from $445-455/mt CFR Asia in mid-July.
At the moment, major Japanese exporters have withdrawn offers to some markets, preparing for a further price increase for November shipment to around $530-550/mt CFR to both Asia and the Middle East. Moreover, there is a rumour that Nippon Steel has already sold a lot of HRC to South America at $550/mt CFR. Most sources said that the allocation for the export market is not expected to go up visibly, and so producers will try to get high realizations from export sales.
Nevertheless, in the Asian market, customers are not ready to accept such a high level so far. Offers to Pakistan have been heard at $530/mt CFR from Japan, though bids are at $515/mt CFR. In Vietnam, official offers have been voiced at up to $550/mt CFR, while the tradable value for the Japanese market has been assessed at $510-515/mt CFR so far.
