Prices of carbon steel hot-rolled (HR) and cold-rolled (CR) sheets in the Japanese spot market have strengthened over the past few weeks as the market absorbed the large price increases pushed through by producers, distributors in Tokyo said on Tuesday.
As of May 25, deals for SS400 grade 1.6 mm thick HR cut sheet (1,219 x 2,438mm) were being transacted in Tokyo at Yen 100,000-103,000/t ($919-947/t), up Yen 2,000/t on week and by Yen 8,000/t from a month ago, according to market sources. Similarly, dealer prices for SPCC grade 1mm thick CR cut sheet (914 x 1,829 mm) were at Yen 113,000-117,000/t, up Yen 2,000/t on week and by Yen 12,000/t from a month ago.
A Tokyo-based steel distributor explained that the slightly larger on-month uptick in CR cut sheet was because the supply-demand balance for CR is much tighter compared with HR, and pointed out that customers who want to secure material have to agree to pay more. “Also, the price increases announced by producers for CR coils and sheets were larger and forced customers to rush and agree on higher prices before product prices rise further,” he explained.
Nippon Steel, Japan’s largest integrated mill, had decided to add Yen 10,000/t to its HR coils and sheets prices for June shipment but lifted prices of other products such as CR, pickled and oiled and galvanized coils and sheets by Yen 15,000/t. The mill had already added Yen 10,000/t for all sheet prices for May shipments, as reported.
A second distributor in Tokyo warned that a minimum of Yen 10,000-15,000/t still needs to be added to market prices, just for dealers to pass along the increases the mills have tabled since October 2020. Between last October and the coming June, Nippon Steel will have lifted its flat products by Yen 40,000-45,000/t, Mysteel Global notes.
“And the integrated mills may even press for additional increases because currently, their increase margin remains smaller than those of the electric-arc-furnace mills,” he predicted.
Tokyo Steel Manufacturing, Japan’s leading EAF steel producer, has added Yen 31,000/t to its HRC prices and Yen 36,000/t for its pickled and galvanized coils for April to June sales. Consequently, since last October the mini-mill has beefed these prices up by Yen 45,000/t and Yen 50,000/t respectively, Mysteel Global notes.
“Japanese flat product prices are now trending upward, but we are afraid that uncertainties affecting the China market might impact sentiment in Japan as well,” the second distributor admitted. “I’m thinking we’d better rush and lift our prices while the market remains stable,” he suggested.
In China, steel raw material and product prices have been softening since May 13 in response to warnings from the central government about runaway commodity prices, as reported.
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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