Japanese steel mills finish SBQ plate negotiations with South Korean ship yards

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Aug 2009

TEX reported that Japan's integrated steelmakers have come to terms with South Korea's major shipbuilding companies on a price increase in the negotiations held between the sides on the Japanese steelmakers' ship plate exports to the Korean shipbuilding companies for shipments in October 2009 to March 2010. The negotiations ran into difficulties in the initial stages because of the Korean shipbuilders' strong insistence on a price reduction.
The Japanese steelmakers keep mum about the contents of the settlement because negotiations remain on the corresponding ship plate exports to South Korea's other shipbuilding companies. The price increase settled this time is seen a small one, but the Japanese steelmakers are thought to have maintained a price level of USD 600 per tonne FOB with the avoidance of a price reduction.
Ship plates or heavy plates for shipbuilding usually represent one of steel products in tight supply-demand conditions. Last year in particular, even a high price level of USD 1,500 per tonne FOB emerged in ship plate exports out of Japan amid fears of a supply shortage due to blast furnace shutdowns on the agenda at integrated steelworks.
Under the existing circumstances, the Korean shipbuilding companies alike demanded a price reduction in the initial stages of the negotiations on new ship plate deals with the Japanese steelmakers. On the contrary, the Japanese steelmakers reiterated their request for a price increase. They pointed out factors such as rising prices again of raw materials and a rebound of steel prices on the whole.
In Asia, supply demand conditions for heavy plates are forecast to slacken further in 2010 when the Japanese steelmakers will hold their ship plate export negotiations on April to September shipments to South Korea because new heavy plate mills are scheduled to go on stream in China and South Korea. Therefore, it is likely that heavy plate exports out of Japan to South Korea will fall steeply next year. Nevertheless, the Japanese steelmakers are expected to respond with attaching importance to quality rather than sales volume in the heavy plate exports they negotiate for products featuring high tensile strengths or ultra thick products, the Japanese steelmakers' two strong points in the heavy plate sector.

Source: TEX Report Limited