POSCO raises prices of HRC, wire rods by $84/t for Q2 sales to Japan

POSCO has started offering hot-rolled coils (HRC) and wire rods for Q2 (Apr-Jun’22) sales to Japan, with the price being increased by JPY 10,000/tonne (t) ($84/t). The loading period will mainly be from May onwards. Meanwhile, cold-rolled coils (CRC) have not yet been offered, but are expected to see a similarly high price hike.

Another major supplier, Taiwan’s China Steel Corporation (CSC), has not yet floated offers for Q2 sales, partly to assess the international situation. However, it is inevitable that prices will rise significantly with rising prices of Chinese materials. Prices of imported materials, particularly thin sheets, are expected to be higher across the board and this is likely to be a factor pushing up the domestic market.

The  manufacturers’ sales prices of HRC and wire rods, including those in Japan, are estimated to be around JPY 120,000/t ($1,011/t) and after last year’s significant price hike, the sales price of manufacturers was at a similar level. This time POSCO has raised prices ahead of other manufacturers.

Domestic manufacturers have not seen any movement to raise prices yet, but on 7 Mar’22 Tokyo Steel stopped offering to assess the situation. The price increase of imported materials is likely to be a positive factor for domestic manufacturers to raise their prices.

Enquiries are increasing, particularly from Europe, owing to the tight supply and demand for steel products in Europe against the backdrop of the situation in Ukraine and overseas manufacturers are reviewing their export prices.

In addition to this supply-demand crunch, high costs are also a factor and manufacturers are working to raise sales prices in Japan and abroad to secure profitability.

Outlook

However, a cause for concern in Japan, particularly in the thin plates market, is the increase in inventory due to factors such as production cuts by automobile manufacturers. The current demand trend is also low and it may take some time before the manufacturers’ re-pricing penetrates the market.

Note: This insight has been published in accordance with an article exchange agreement between SteelMint and Japan Metal Daily.