Posted on 21 Feb 2023
Improved market conditions and the relentless rise in costs have led Tokyo Steel Manufacturing, Japan's largest independent mini-mill, to increase domestic prices of its rebars by Yen 3,000/tonne ($22/t) for March contracts, the company announced on Monday. At the same time, the mini-mill is also adding Yen 3,000/t to all H-beam prices except for those for medium- and large-sized 'base size' beams.
As a result, the mini-mill's price for base-size 13-25 mm diameter rebars climbs to Yen 100,000/t from current month prices, while that for 400x400 mm heavy H-beams – a less popular size – rises to Yen 131,000/t. On the other hand, its price for 1.5-1.7 mm hot-rolled coils (HRCs) with width up to 1,630 mm stays at Yen 117,000/tonne and that for its base-size square pipes (16 mm wall thickness) remains at Yen 130,000/t.
"Although there is still a sense of stagnation in the movement of goods in the market for building material varieties – and there is still a delay in passing on distribution prices, depending on the region – steel frame processing and primary processing are expected to remain busy nationwide," the company explained. Construction demand is expected to stay firm after early spring, with redevelopment projects, manufacturing-related investments, and other large-scale projects continuing to be planned, it added.
"As for steel sheet varieties, domestic steel manufacturers continue to curb supply, and market inventories of both thin and thick sheets are on a downward trend," the mini-mill said. "In addition, since there is a clear stance on raising prices of imported steel products relative to Japan, it is expected that the supply-demand balance will improve in the future as demand recovers and market inventories decline further," it added.
The company is currently receiving bids from overseas buyers of its hot coils at $690-700/t FOB for HRCs, up $40/t on month, and $830-850/t FOB for H-beams, up $20/t on month, Mysteel Global understands.
Curiously, in its statement, Tokyo Steel spoke little about rising production costs, even though last Thursday, it raised its buying prices for all grades of ferrous scrap for deliveries to all works and scrap bases by Yen 2,500/t effective from Friday deliveries, as Mysteel Global reported.
But rising costs are nonetheless a growing worry for the rebar makers. At a meeting of Japan's small bar industry association last Thursday, Hideichiro Takashima, head of the country's largest rebar maker, Kyoei Steel, had expressed strong concerns about the continuous increase in costs.
"Ferrous scrap prices will continue to remain high amid the global decarbonization trend. On top of that, the small bar industry is facing the daunting task of a sharp increase in electricity prices, (and) increases in ferroalloy and other second materials prices and transportation costs," he is quoted as saying.
Though Kyoei's Takashima and the heads of Japan's other major mini-mills might have been annoyed at Tokyo Steel's decision last week to lift scrap prices, the company's decision to raise rebar prices Monday for March might have won it back some friends. Even Tokyo Steel's rebar production is very small, its price increase announcement will create a precedent for other mini-mills – like Osaka-based Kyoei, Godo Steel and Itoh Steel whose rebar production is far more important for their business – to raise their prices.
Kyoei Steel will announce its rebar prices for March on Tuesday morning, Mysteel Global understands.
During February, Tokyo Steel expects to produce 260,000 tonnes of finished steel, consisting of 95,000 tonnes of H beams, 115,000 of hot coils and 35,000 tonnes of plates, Mysteel Global understands. Those three items together will account for 245,000 tonnes of the company's output target this month, leaving just 15,000 tonnes for galvanized sheets, wire rods, sheet piles, heavy plates and several others – including rebars.
Source:Mysteel Global
