Prices of carbon steel hot-rolled (HR) and cold-rolled (CR) sheets in Japan’s domestic spot market strengthened by Yen 1,000-2000/tonne ($9-18/t) on week again on supply tightness and producers’ price hikes, and the strengthening may slow down during the Bong Festival holidays over August 13-15 and then picks up the pace again, according to market sources.
As of Wednesday, the SS400 grade 1.6mm thick HR cut sheet (1,219×2,438mm) were transacted in Tokyo at Yen 116,000-119,000/tonne ($1,051-1,078/t), up Yen 2,000/t on week, and SPCC grade 1mm thick CR cut sheet (914×1,829mm) at Yen 133,000-136,000/t, up Yen 1,000/t on week, or both up about Yen 6,000/t on month, according to sources.
A Tokyo-based distributor shared that inquiries for such products have subsided ahead of Bon Festival, which may slow down the climb-ups of these prices this week. However, “fundamentals have varied little and supply is extremely tight, so prices will be back to the fast lane after the holiday is over,” he predicted.
Bon Festival is one of major holidays in Japan with many domestic companies usually closed around August 11-17 for a longer celebration, Mysteel Global understands.
Japan’s HR and CR cut sheet prices have been on an uptrend since September-October 2020, and the pace has picked up since April, with the monthly growth for the former at around Yen 5,000-6,000/t and at Yen 5,000-9,000/t for the latter, and both are now 40-45% higher on year, according to the distributor.
“We have not experienced such rapid price rises for such products, but we can’t say these prices have peaked either as supply tightness has been persisting and may even be worsening,” he added.
A sales official from a coil center in Tokyo lamented loudly about the difficulty for his company to secure enough base feeds (HR and CR coils) from suppliers, disclosing that they could only manage to get hold of about 70-80% of their ordered volume from the producers for now.
“Spot market buyers are actively inquiring about supplies and we’d like to seal all the deals, unfortunately, we have had to be selective with the limitation on base feeds, and we have not been able to fully engage our processing capacity,” he sighed, acknowledging, though, that the struggle will come to an end any soon.
“Instead, there are signs that supply tightness may worsen, as domestic manufacturers and construction sector have been stepping up their operational pace, as a series of construction projects will be launched in October-December as planned, and steel flats will only become more limited and producers may raise prices again,” he predicted.
Nippon Steel, Japan’s largest integrated giant, has lifted its hot-rolled coils and sheets prices by a total of Yen 40,000/t, and the other coils and sheets by Yen 45,000/t in four rounds of price adjustments over May-September, to transfer higher input costs and reflect tightness in supply, as reported.
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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