Japanese producers have managed to increase HRC export prices significantly over the past month, supported by limited allocation and the better mood in the major consuming markets. Mills have increased their domestic prices for October recently, but in the export market they have faced pressure from aggressive Chinese offers lately and have been forced to provide some discounts, which, however, were limited.
Most deals for October-November shipment SAE1006 HRC from Japan have been done at $520-525/mt FOB on average in the middle of September, though some small-volume deals to Asia have been done at higher levels of up to $535-540/mt FOB, as SteelOrbis learned from market sources. Since the middle of August, suppliers have managed to increase prices by around $50/mt or even higher in some transactions.
In the Asian market, Japanese suppliers have been continuously increasing deal prices during the month, with the latest medium-volume deal for SA1006 HRC done at $549/mt CFR Vietnam. At the moment, offers from major suppliers are coming at $545-550/mt CFR Vietnam this week, though last week they reached $560-570/mt CFR. Discounts have been given by suppliers as customers have dropped bids, seeing more aggressive Chinese prices.
In Pakistan, a deal for 15,000 mt of HRC from Japan was closed at $560-565/mt CFR earlier in September, which translates to $535-540/mt FOB. But for now offers have already declined to $550/mt CFR.
One of the highest price levels was achieved by a Japanese supplier in Indonesia, where a small-volume deal was signed at $570/mt CFR last week.
Offers from Nippon Steel and JFE Steel have been heard at $570-590/mt CFR to Bangladesh for November shipment, but no deals have been reported at such a high level.
“Japanese mills are still offering high and pushing up local prices due to tight supply,” a trader said. Nippon Steel has announced an increase in local HRC prices of around JPY 5,000/mt ($48/mt) for Octobery deliveries, according to sources.
Though bearish moods in the international market may bring down ex-Japan HRC prices in the coming weeks, limited allocation from major mills will continue, giving some support. “Capacities [of both Nippon Steel and JFE Steel] were reduced early this year, so supply will remain tight,” a local source said.
