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Japan starts negotiations on SBQ plates for Korea for Q3 shipment

TEX reported that negotiations on shipbuilding steel plates for Korea have been commenced for shipment of (July to September) 2012 quarter. Some Japanese mills required price increase of which detailed ranges are not certain. Although till now, the Japanese mills had offered price increase, they had been overridden consequently by a shipbuilder side. Attention is drawn whether negotiations of this time will go the same way as the previous cases or halt reduction in price.
What these negotiations are different from the previous cases is that negotiations for next quarter shipment have started although those with some shipbuilders have not been finalized yet for this quarter shipment. Usually, once the Japanese mills conclude a contract with any one of the shipbuilders, then, they are able to finalize their negotiations with almost all other shipbuilders in an equal or egalitarian manner. In case of this quarter, although it is subtle whether the Japanese mills would have ended finally their negotiations with the Korean shipbuilders as it is uncertain that POSCO have formally concluded contacts, it is seen that their negotiations have been finalized because the mills are about to make contracts with the two major shipbuilders.
It is because this time, some major shipbuilder is still, though, insisting on lower prices by about USD 20 than those for others, and is pressing for acceptance of such markdown against the Japanese mills. As there is no enough time for this quarter, it is thought for shipment of this quarter to be extended.
In the recent negotiations with Korea, even in case bid prices are fetched down in case of hot rolled steel coils, a Korean side is said to insist on priced own being accepted. Then, if a shipbuilder revises its bid prices and shows a stance to make a contract at the same prices as others, it is interesting whether such a shipbuilder is considered to accept price increase.
Anyhow, it is foreseen for negotiations for next quarter shipment will become tough further. Worldwide, it is supposed that there is no room to cut prices any more. Accordingly, negotiations are showing an aspect of being driven to the edge to see whether the mills will be able to stop further price down, and make prices rebounded.
Source: TEX Report Limited