JFE Steel, Japan’s second largest integrated steelmaker, has lifted all its construction steel prices other than H-beams by Yen 5,000/tonne ($48/t) for new bookings from the domestic buyers starting this week, a company official confirmed on September 23.
This is believed to be the first time for JFE to raise its construction steel since November 2016, according to the Japanese sources, and the Japanese steel mill already raised the H-beam price by the same degree earlier in June to reflect higher input costs.
JFE’s latest price hike is applied to rolled columns, plates, steel pipe piles, sheet piles, according the company official, explaining that the move is also due to higher input costs, and “the hike is unavoidable, as only by doing so, we can continue to produce and supply,” he added.
“We will not change the H-beam price this round but to wait for the market to accept the earlier price hike,” the company official confirmed.
September is usually a month in Japan for the steel buyers to actively book construction steel on the anticipation of the demand in Autumn, but it has been a rather quiet month so far this year, market sources noted.
“Demand from the civil engineering will probably stay firm over October-December, and construction steel consumption from the reconstruction works in the areas hit by natural disasters earlier summer will continue,” a construction steel trader in Tokyo said, and he believed that “overall construction steel demand may not be much higher but should be able to stay at a certain level for the rest of the year”.
JFE’s price hike by Yen 5,000/t is viewed as reasonable by the Japanese mills, reasoning that this is the minimum rise for them to avoid making losses, according to the Tokyo trader.
“The Japanese integrated mills are trying to make profits in the second half of FY20 (October 2020-March 2021) to make up for the losses in the first half, so they will probably take stronger stances on prices, and additional price hikes may already be in their plan,” he shared.
JFE restarted its No.4 Fukuyama blast furnace with an inner volume of 5,000 cu m at its West Japan Works on August 26 to respond to better demand from the country’s automakers, as reported. The furnace has returned to normal operations earlier than the originally-targeted the end of October with the aid of the advanced technology, the company official updated on Wednesday.
“Our Fukuyama works also produces construction steel, so if the demand for such products recovers fast too, we will be able to accommodate that as well,” he added.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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