Nippon Steel has joined rival Tokyo Steel Manufacturing and announced a Yen 3,000/tonne ($23/t) rise in its domestic H-beam prices for March contracts (April roll), the Japanese integrated mill’s first increase in H-beam prices since April last year.
“Due to the high prices of materials, logistics costs, electricity prices and others, and the impact of foreign exchange rates, yen-based costs of domestic steel manufacturers remain high,” the company said in a statement on Thursday.
“Taking this situation into account, the price will be increased by Yen 3,000/tonne this month,” it said, adding that it will keep a tight rein on the quantities it sells. “We will carefully examine the status of warehousing and inventory and underwrite the minimum necessary,” it warned. Its subsidiary Nippon Steel Structural Shapes making H-beams in Wakayama in western Japan will also raise its prices by the same Yen 3,000/t.
On Monday, Nippon Steel’s closest competitor in sections production, mini-mill Tokyo Steel, announced that it was raising prices for some heavy section items including H-beams, checker H-beams and I-beams for April sales by Yen 3,000/t, as Mysteel Global reported. The increase took Tokyo Steel’s price for 400x400mm ‘senior’ H-beams to Yen 134,000/t.
Besides its need to offset higher input costs including those of raw materials, Nippon Steel also figures that market fundamentals are aligned for a price rise to be accepted in the market.
“Orders are firm (and) mills continue to operate tightly, maintaining an appropriate level of inventories,” the steelmaker said. “We assume that the supply-demand situation will continue to be tight as the start of construction begins in earnest,” referring to Japan’s peak spring season for building projects.
On the same day it announced the price increase, Nippon Steel also noted that stocks held by its Tokiwakai grouping of domestic H-beam dealers at the end of February had reached 195,900 tonnes, higher by 4,500 tonnes or 2.3% from end-January. Though this marked the fourth straight on-month rise, Nippon Steel said the inventory ratio was down by 0.11 points at 2.99 months, suggesting that stock levels are satisfactory for prevailing market conditions.
The producers’ price increases have already filtered into Japan’s markets for sections, with deals for SS400 grade 5.5/8x200x100mm H-beams in Tokyo now being negotiated at Yen 128,000-129,000/t, higher by Yen 3,000/t on month and marking the first increase in six months. “H-beam prices are nearing their highest level since the financial crisis in around September 2008,” one Tokyo-based market watcher also noted.
Written by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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