Japan: Nippon Steel cuts stainless steel wire prices for Sep-Nov'24 contracts

Japan Metal Daily: Nippon Steel Stainless Steel has announced a price reduction for stainless steel wire rods for the domestic market, effective for contracts from September to November 2024 (October to December rolls). Prices of nickel (SUS304) will decrease by JPY 45,000/tonne (t) ($316/t), while prices of chrome (430) will drop by JPY 5,000/t ($35/t). This reduction is attributed to falling LME nickel prices and the effects of the yen's appreciation alongside the dollar's depreciation, which have led to a decline in the alloy link component according to the company's pricing formula.

In the previous quarter (June to August contracts), prices of nickel and chromium were raised by JPY 50,000/t ($351/t) and JPY 10,000/t ($70/t), respectively. Following the latest reductions, both metals now cost JPY 5,000/t ($35/t) more than before. This marks the first price reduction for nickel products in three quarters and the first decrease in chromium prices in a year.

With regard to major special steel grades, prices of SUSXM7 and 303 will be lowered by JPY 55,000/t ($386/t), 316 by JPY 60,000/t ($422/t), and 310S by JPY 105,000/t ($738/t), reflecting fluctuations in alloy costs based on the amount of alloy added.

The September to November 2024 contract is based on the average raw material prices from 19 June to 17 September, during which the LME nickel price was $7.28/pound (lb), chromium was $1.60/lb, and the exchange rate was $1 = JPY 150.75. In comparison, in the previous report, nickel was priced at $8.36/lb, chromium at $1.60/lb, and the exchange rate was at JPY 156.84. The overall price reductions can be attributed to a decrease in nickel prices and favourable foreign exchange rates.

In the domestic final product market, demand has been steadily recovering, particularly in the automotive and semiconductor sectors, although the construction sector remains weak. Meanwhile, the overseas market, especially in East Asia, lacks vigour. However, the company is optimistic, noting that there are signs of improvement, such as an increase in order volumes from certain customers, including those in the semiconductor and welding materials sectors.

In this market environment, the company plans to "carefully monitor trends across various demand sectors and align its sales and production activities with consumer needs". The Yamaguchi Works and Bar Wire Plant are anticipated to maintain operations at 70% capacity during the October to December period.

While there has been no significant change in the volume of stainless steel wire imports currently, the company believes that "the oversupply situation in Asia is unlikely to improve". They anticipate an increase in pressure on imports of wire rods and processed products to Japan and will approach this trend with heightened caution.

Additionally, in response to fluctuations in raw material costs, the company will emphasise solutions that leverage distinctive products, such as high-purity ferritic stainless steels known for their price stability and resource-saving duplex steels. Their strategy focuses on addressing customer challenges and enhancing product value to meet a broad spectrum of needs.