Japan: Nippon Steel likely to raise HRC export offers for Sept'23 shipments

Japanese steel major, Nippon Steel, is likely to raise its hot-rolled coil (HRC) export offers for September 2023 shipments. The company said that it has closed all August shipment negotiations and is now moving to offer for September. Offers are likely to be increased to around $680/t CFR EU and $630/t CFR Asia.

Why export offers may rise?

1. Scheduled maintenance shutdown: The company has planned a maintenance shutdown of its HRC mill for around 10 days. Roughly 200,000 t of production will be impacted due to the shutdown, informed a source. However, demand still remains weak.

2. Hike in HRC offers by Hoa Phat: In Asia, Vietnamese steel major Hoa Phat has hiked monthly HRC (SAE1006, non-skinpass) prices by VND 300/kg ($8/t) for July and early-August sales. Post revision, effective prices stand at $578/t CIF HCMC or VND 13,700/kg, excluding VAT.

3. Increasing steel exports from Japan: Japan's steel exports rose by 16% m-o-m to 2.8 million tonnes (mnt) in May. Exports to the EU increased by 24.5% to 277,000 t, surpassing 222,000 t in May last year. Exports to the Middle East also increased by 85.7% to 112,000 t after Eid. Exports to South Korea increased by 7.9% to 498,000 t, marking the sixth consecutive month of growth.

The major steel mills in East Asia like Baoshan Steel were having a tough time over the past few months owing to squeezed margins. One important thing to watch out for is whether these large mills will increase their prices for August or September deliveries.