Nippon Steel, Japan’s largest integrated steelmaker, has raised prices of its carbon steel flats sales to the spot market and re-rollers by Yen 15,000/tonne ($144/t) for February shipments, as the production costs have been rising, and this may enable the domestic steel prices to rise to match the global levels, a company official confirmed on Tuesday.
The price increment will apply to Nippon Steel’s hot-rolled, cold-rolled, pickled, and galvanized coils and sheets, and the company has started notifying its customers of the latest decision, according to the company official.
“The latest price hike will not affect our long-term contract customers, but overall input costs have been rising, and all the customers including those under the long-term deals should be fully aware of our challenges,” she added.
Together with the latest adjustment, Nippon Steel has added a total of Yen 20,000/t to its carbon steel flats since October shipments, Mysteel Global notes.
Nippon Steel does not disclose its final list prices, but as of January 12, the SS400 grade 1.6mm thick HR cut sheet (914×1,829mm) are transacted in Tokyo at around Yen 76,000/t, and the CR cut sheet of the SPCC grade with the same dimensions and 1mm thick are traded at Yen 86,000/t, both up Yen 1,000/t from the end of 2020 or Yen 3,000/t higher from last October, sources confirmed.
A Tokyo-based trader expressed little surprise at Nippon Steel’ latest move, as flat steel has been with tight supply against steady recovery in demand and the buyers may have limited resistance against the price rise.
However, “we are very surprised at the degree of the price hike, Yen 15,000/t is substantial, indicating that the steel mill must have the great urgency to lift its prices,” he commented.
“The company has already halted spot sales in January, and any customers from the spot market will probably have to agree on higher prices when Nippon Steel resume the sales in February, as there is no grace period in between for such buyers to stock up any tonnage,” he added.
Nippon Steel has prioritized all its limited supplies to the long-term customers and end-users and to fulfill deliveries of the earlier-signed contracts, as reported.
The latest data released by Nippon Steel on January 7 showed that by the end of November, stocks of carbon steel hot-rolled, cold-rolled and coated coils and sheets at Japan’s steel producers, coil centers and distributors fell to a new low since April 2010 or down another 0.7% on month to 3.54 million tonnes.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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