Nippon Steel Stainless Steel Corp (NSSC), Japan’s largest stainless producer, is again raising list prices of 300-series cold-rolled coils (CRCs) and plates for domestic sales to distributors, this time by Yen 5,000/tonne ($48/t) for November orders, a sales official from the company confirmed on November 6. The adjustment is its fifth since June and again, it is blaming higher nickel prices.
NSSC, a wholly owned subsidiary of Japan’s largest integrated steelmaker Nippon Steel, began raising its prices for 300-series CRC and plate since June on the back of rising nickel costs, adding Yen 5,000/t for June and August sales, Yen 10,000/t for September and another Yen 5,000/t for October sales. With the latest decision, NSSC’s total increase has reached Yen 30,000/t.
“Nickel prices are still showing a strong tone, so we may lift 300-series prices further for December sales,” the official warned. “But the Yen has strengthened lately and how that might figure in our pricing formula we can’t tell at the moment,” he explained.
When deciding its product prices based on its agreed surcharge formula with customers, NSSC uses the average of alloy prices over the prior two months. During September-October, the average nickel price was $6.82/lb, up $0.16/lb from that over August-September, while the average Yen=US dollar exchange rate in October was around Yen 105.2=$1. In Tokyo’s foreign currency market Friday, the Japanese currently was trading higher at Yen 103.5=$1, Mysteel Global notes.
On the other hand, for its sales of 400-series CRC for this month, NSSC has decided to keep its prices unchanged after having settled ferrochrome prices at $1.22/lb for October-December, unchanged from July-September, the official explained. The company last lifted 400-series CRC prices by Yen 5,000/t for June sales, as reported.
NSSC does not disclose its exact list prices after adjustments, but as of November 6, deals involving SUS304 2mm CR cut sheet were being transacted at Yen 370,000/t in the spot market in Tokyo, up Yen 10,000/t on month. For SUS304 7mm thick plate, business was still being done at Yen 500,000/t, unchanged on month, according to sources.
A stainless distributor in Tokyo was not surprised at NSSC’s additional hike, but he had hoped that suppliers would keep their prices unchanged for November and wait for market prices to rise so that previous increases by the mills might finally be digested.
“Our customers have just started reluctantly agreeing to the Yen 10,000/t rise for 300-series CRC (for June and August), but now we have to persuade them to accept another Yen 20,000/t for our offer prices,” he grumbled. “It will be challenging for us because the demand recovery in the spot market is still slow and customers are in no in hurry to secure materials,” he warned.
The only cause for optimism is the fact that the stainless producers quietly trimmed their CRC output by around 20% in October and again this month, he’d heard, though they’re planning to claw this back to only a 10% cut by end of this year to meet firm demand from auto-related customers. “Stainless supply for the spot market will be still kept tight to meet the actual demand,” he added.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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