Prices for Japanese hot rolled coil (HRC) in the export market have not changed much over the past month since, though the downtrend has prevailed in Asia and the Middle East markets, allocation from Japan has remained limited and exporters have avoided cutting prices. They are targeting some increase in the near future, citing better domestic demand, still reduced output, and the upward mood in the Chinese market after the holiday. Nevertheless, the allocation for Japanese December-January rolling coils for the export market is expected to increase after the major mills restart facilities idled earlier.
Offers for December shipment SAE1006 HRC from Japan are from $520-525/mt FOB to $530-540/mt FOB depending on the destination, stable compared to mid-September, when sales for October-November shipments were done. Sources have reported that there has been a lack of firm offers in the market lately. “Nippon has almost no allocation, just for their JV downstream facilities,” a major Japanese trader said. JFE Steel has been offering to traditional outlets, but has refused to provide any large discounts.
In the Asian market, trading activity in Vietnam has been low for ex-Japan coils as customers have been focusing on buying ex-China and ex-CIS HRC, while prices have been falling. Indicative offer price levels for ex-Japan HRC have been at $545-550/mt CFR in Vietnam, with no fresh deals reported in the spot market as it is “not so competitive,” a source said.
Offers to Indonesia have been heard at $570/mt CFR, while buyers’ price idea has been at $560/mt CFR. In Bangladesh, Japanese suppliers have also targeted $570/mt CFR or slightly below. The limited allocation from Japan has remained the major problem for Asian customers, sources have said, “not the price,” a trader from Southeast Asia said.
The targeted price level from Japan in the Middle East and Turkey has been at around $540-550/mt CFR, which is not attractive for customers.
Though positive moods have been prevailing in Japan’s HRC export market, some discounts in the future are possible, when mills increase production, sources told SteelOrbis.
“Allocation will remain limited this year as domestic demand picks up and production has not recovered yet,” a source from Japan said, adding that the full operation at the facilities idled earlier this year due to the difficult market situation will be in January.