Japanese rebar producers have decided to transfer the rise in power costs to their product prices effective from November 1, claiming the increment in power charges is sharp and it can’t be digested only by company efforts.
Tokyo D-Bar Hanbai, a rebar sales venture between rebar producers Tokyo Tekko and Itoh Iron & Steel, together with Kanto D-Bar Steel, the sales venture between Godo Steel and Asahi Industries, have both decided to add Yen 10,000/tonne ($67.5/t) for sales from November 1, marking the first price hike since April, according to the companies.
Company officials commented that power charges and LNG prices have increased largely and the recent rapid depreciation of Yen will keep such costs (also including prices of imported materials such as alloy) hovering high.
“The cost structure has changed and it needs to be transferred to our product prices, otherwise we may not be able to supply products stably,” a Tokyo D-Bar official emphasized.
Japan’s power charges in the second half (October-March 2023) of the current fiscal year are estimated to rise to Yen 10,000 to produce 1 tonne of steel products for electric-arc-furnace maker – about twice of those a year ago, as reported.
A Tokyo-based construction steel trader believed that rebar producers would start lifting prices from December because Kyoei Steel, Japan’s largest steel producer, had announced on October 19 to keep the prices unchanged for November sales, though it claimed the rise in production costs.
“But on the next day of Kyoei’s announcement, Japanese Yen against U.S. dollar had just weakened further to Yen 150, hitting the lowest in 32 years. This might have prompted Japanese rebar producers to decide to lift their product prices,” he said, adding that other rebar producers may make similar hikes soon.
Tokyo D-Bar and Kanto D-Bar do not reveal their exact list prices. But as of Wednesday morning, SD295A 16-25mm rebars were transacted at Yen 118,000-121,000/t, unchanged on month but down by Yen 2,000-3,000/t from two months ago, sources confirmed.
Written by Yoko Manabe, yoko.manabe@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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