- Overseas steel prices rise on higher production costs
- Supply tightens on recovering shipbuilding, construction demand
Nippon Steel has announced an additional price increase of JPY 5,000 per tonne (/t) for thick plates across all domestic market sectors, including contract-based (corded) sales and in-store sales. The revised prices will apply to new contracts from November, corresponding approximately to shipments in January 2027. The increase represents a rise of around 3-4%, and the company will begin requesting acceptance of the revision from customers and distribution companies.
The latest revision follows a JPY 10,000/t price increase introduced for contracts from April this year and a further JPY 5,000/t increase for contracts from July. Including the latest announcement, Nippon Steel’s cumulative price increase for the current fiscal year will reach JPY 20,000/t.
Previous price increases largely implemented
Nippon Steel cited soaring prices of key raw materials and rising costs, particularly petroleum-related expenses, as the primary reasons for the additional increase. Production and supply-related costs, including labour, logistics and auxiliary materials, also remain elevated.
Regarding the cumulative JPY 15,000/t increase announced previously, the company’s Thick Plate & Building Materials Sales Department stated that negotiations had progressed over the past month, with the earlier increases achieving broad implementation. This progress prompted the company to proceed with the additional revision at this time.
Although the total cost increase is expected to exceed JPY 20,000/t, Nippon Steel anticipates that an initial adjustment within the JPY 5,000/t range will receive broad acceptance from customers. The company aims to secure the price levels required to maintain a stable production and supply system.
Contract-based pricing shows progress
Price increases under contract-based arrangements vary by company, depending on the starting point and the applicable adjustment period, whether quarterly or semi-annual, making it difficult to generalise across the market.
However, the company noted that formula-based price adjustments and other factors have resulted in several customers exceeding JPY 15,000/t in cumulative increases as of October, with agreements reaching between JPY 15,000/t and JPY 20,000/t.
This indicates that price increases under contract-based arrangements are helping lead the implementation of price revisions in the retail sector.
Recovering demand and tight domestic supply
Domestic demand for thick plates continues to recover gradually overall. On the supply side, domestic manufacturers are facing increasingly tight conditions as demand strengthens, particularly in the shipbuilding and construction-related sectors.
Nippon Steel is operating both its Kimitsu and Oita No. 2 mills at full capacity to meet demand. Meanwhile, overseas manufacturers are also raising prices in response to rising costs, contributing to higher prices for thick plates destined for Japan.
These developments are adding to the pressure on domestic supply and reinforcing the need for further price adjustments.
Rising costs support further price revisions
Against this backdrop, Nippon Steel considers appropriate cost pass-through essential to maintaining a stable supply chain. The company emphasised that steelmakers, processors and logistics providers must all be able to reflect rising costs in their prices and secure sufficient profitability to sustain their operations and reinvest in production and supply capabilities.
Costs beyond major raw materials, particularly labour and transportation, are expected to continue rising. Consequently, even if raw material prices decline temporarily, the company does not foresee an immediate environment in which product prices can be reduced.
Going forward, Nippon Steel will continue to closely monitor demand trends, domestic and international steel product markets, and changes in raw material, energy and other costs. It will also work to secure the price levels necessary to sustain a stable and long-term production and supply system.
Note: This article is published as part of a content exchange agreement between Japan Metal Daily and BigMint.
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