Japan's Nippon Steel cuts HRC export offers for Oct'24 shipments

Japanese steel major, Nippon Steel, has reduced its hot-rolled coils (HRCs) export offers for October 2024 shipments. Offers are currently assessed at $520/t CFR Asia. Previous offers stood at $570-600/t CFR for August 2024 shipment, as per data maintained with BigMint. The company said that it has closed all September shipments negotiations and is now moving to offer for the following month. However, the company is not offering to Europe due to safeguard and anti-dumping trade measures.

Factors behind reduction in export offers

1. Declining global steel prices: The global market sentiments remained sluggish amid weaker demand and ongoing anti-dumping probes globally. In Asia, Vietnam's Formosa Ha Tinh Steel (FHS) has announced a price cut of $17/t for October deliveries while Hoa Phat reduced HRC prices by $15/t for its October-November'24 sales. However, China's Baosteel, world's leading steelmaker, has kept its monthly HRC prices stable for October after reducing prices for two months consecutively.

2. Japan's construction activity remains slow: Sluggish domestic demand and labor shortages exacerbated by extreme heat have curtailed construction activity, resulting in reduced cargo movement of construction materials nationwide. While the overall market remains lackluster, there is hope for improvement in the second half of the year if construction demand rebounds.

3. Low raw material costs: Kanto Iron and Steel Cooperative Association's Sep'24 scrap export tender saw a notable decline in its winning bid prices. Bid prices dropped by $23/t (JPY 5,236/t) to $303/t (JPY 42,720/t) FAS, down from $326/t (JPY 47,956/t) in Aug'24. This marks the lowest bid level in nearly two years, close to the JPY 42,061/t seen in Aug'22.

Global iron ore prices are also decreasing. Benchmark Fe 62% fines prices fell by $6/t m-o-m to $93/t CNF China in September (till 11th) against $99/t CNF in the previous month.