The Japanese steel producers will not be able to allocate more hot-rolled coil (HRC) for exports, as they are prioritizing their domestic customers with limited supplies, even though the export offering prices of SS400 grade HRC below 2mm are approaching $800/t FOB, steel traders in Tokyo shared on January 8.
The HRC price has been up by $70-80/t on month, and some overseas buyers have reportedly agreed on the offering prices, according to sources.
“The export booking volume must be very low, as the Japanese flat steel producers have been busy fulfilling long-term deals with their domestic customers, so they have no bandwidth to enjoy the really attractive export prices” a flat steel trader in Tokyo explained.
A sales official from a mini-mill confirmed, disclosing that his company has already filled up the HRC export quota until March and has stopped signing new export deals since mid-December. “Overseas customers were bidding at $710-720/t for our HRC before we stopped offering, and apparently the prices have strengthened so much to $800/t FOB, but sadly nothing much we can do about it,” he shared.
He estimated that not only his company but the other Japanese flat steel producers may have little to sell abroad, and their offerings are more just to test the market level.
HRC is Japan’s top steel product in exports, and usually, about 70-80% of Japan’s HRC are exported under long-term contracts to the Japanese producers and their processing plants in Asia for cold-rolling or galvanizing or to the Japanese-invested manufacturing plants in Asia to produce electrical home appliances or automobiles, Mysteel Global understands.
In November, Japan’s HRC exports already showed declines, with the total volume reaching 750,515 tonnes, down 12.3% on the year and 16.2% lower on month, and the unit price averaged $528/t FOB, according to the latest data by the Japan Iron & Steel Federation (JISF). The tonnage was mainly booked around August-September when the country’s domestic demand for HRC had picked up especially from the automakers.
Japan’s HRC exports over January-November added up to about 10.1 million tonnes, up 3.1% on the year, according to the JISF data, mainly because of the higher exports over January-March before the pandemic outbreak in Japan, Mysteel Global noted.
Written by: Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under the article exchange agreement between Mysteel Global and SteelMint.
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