Japan’s dealer prices of carbon steel hot-rolled and cold-rolled sheets across the country will probably rise on supply tightness, as customers will probably be agreeable on higher prices with the distributors’ and producers’ price hikes, according to sources in Tokyo and Nagoya in central Japan.
Actual demand in the spot market has been on the recovery, which alone will not lend enough support to the prices but limited supplies from the producers and thinning stocks at the distributors have enabled the distributors to raise their prices too, rejecting lower bids, sources explained.
As of October 22, the SS400 grade 1.6mm thick HR cut sheet (1,219×2,438mm) are transacted at around Yen 73,000/tonne ($698/t), and those of the SPCC grade 1mm thick CR cut sheet (914×1,829mm) at Yen 80,000/t, both unchanged on month but having stopped from falling after declines by Yen 6,000-7,000/t and Yen 3,000/t respectively in total since January, sources confirmed.
Besides, most of the Japanese steel distributors have started adding Yen 1,000-2,000/t onto their offering prices since the end of September with some raising their prices more blaming the supply tightness and the price hikes by both the domestic and overseas suppliers.
“Actual transaction activities in the spot market have been lacklustre, so the pace of the price rise has been slow, but at least the drop has stopped and will not repeat any soon,” a distributor in Tokyo added.
Since July, Asian steel producers have been raising their prices, among which are Nippon Steel, Tokyo Steel Manufacturing, Taiwan’s China Steel Corp and South Korea’s Posco, with the price increases all around Yen 5,000/t for deliveries until December, as reported.
By the end of August, stocks of carbon steel hot-rolled, cold-rolled, and coated coils and sheets at the Japanese steel producers, coil centres and distributors, fell 47,000 tonnes or 1.2% on month to 3.93 million tonnes or having been hovering below 4 million tonnes for three months mainly with less output from the producers. Flat stocks below 4 million tonnes in Japan is interpreted at an abnormally low level, Mysteel Global notes.
A sales official from a coil centre in Nagoya also expressed the concern on lower stocks, as this may limit their business opportunities with the domestic customers other than the Japanese automakers, “we need to prioritize our supplies to the auto manufacturers, and our operational rates have improved recently but it may have peaked with the limited feeds from the steel mills,” he admitted.
In August, the operational rate among Japan’s core steel coil centres averaged 53.7%, down from 61.7% in July but higher from the 41.2% in May, according to the latest available data from Zenkoku Coil Center Kogyoukai, an alliance of 96 coil centres across Japan, though the operational rate may recover again in September, as August is usually with fewer working days with many public holidays, the coil centre official explained.
– This article has been uploaded under the article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply