Japan: Nippon Steel keeps May domestic H-beam prices flat

Nippon Steel, Japan's largest integrated mill and a leading H-beam producer, has decided to keep its H-beam prices for domestic spot sales for May unchanged, to give the market a month to digest its previous rises, the company announced on May 18.

Nippon Steel's subsidiary in Wakayama in western Japan, Nippon Steel Structural Shapes, will also roll over its H-beam prices for this month, the company decided.

Both makers had previously lifted their H-beam prices by Yen 5,000/tonne ($39/t) for April sales, as reported.

Nippon Steel and the subsidiary do not reveal their list prices, but as of May 18, deals in Tokyo involving SS400 grade 200x100mm H-beams were being transacted at Yen 118,000-119,000/t, up Yen 3,000/t on month, sources confirmed.

A distributor in Tokyo was not surprised at the steel giant's decision because its closest H-beam competitor in the Japanese market, Tokyo Steel Manufacturing, announced earlier this week that it was keeping the list prices of all its finished products - including those of its 'junior' and 'senior' H and I beams and sheet piles - unchanged for June, also to wait for the market to absorb its previous hikes. Tokyo Steel had lifted its beam prices by Yen 3,000/t for May, as reported.

"H-beam demand is improving and stocks are decreasing to an adequate level (so) the market condition is not bad," the distributor said. "We expect that H-beam prices will rise further, but we're concerned that the recent softening of scrap prices will lead buyers to wait for the falls to be reflected in lower finished steel prices," he noted.

By the end of April, H-beam stocks held by Nippon Steel's Tokiwakai group of some 90 distributors across Japan totalled 191,500 tonnes, down 5.7% on month and 7.4% lower on year, making for the second consecutive on-month decrease, Mysteel Global notes.

As for project-based beam sales, in its upcoming negotiations with buyers Nippon Steel has decided to add Yen 20,000/t to its base prices to offset recent rises in production costs.

H-beam demand from major private and public works construction projects across Japan has been firm thanks to planned urban redevelopment projects and active demand for logistics warehouses, a construction steel trader remarked, and such projects are expected to become more active from autumn.

"It seems that (Nippon Steel) is trying to lever-up H-beam prices (for projects) to a high enough level to be able to secure an adequate profit before actual inquiries become more active later in the year," he observed.

Written by Yoko Manabe, yoko.manabe@mysteel.com

Note: This article has been published in accordance with an article exchange agreement between Mysteel Global and SteelMint.