Japan: Nippon Steel lifts flat steel prices by another $92-138/t

Nippon Steel, Japan's largest integrated mill, is adding another Yen 10,000-15,000/tonne ($92-138/t) to its prices of carbon steel flats for June shipments to spot buyers and re-rollers, a company official confirmed Wednesday, stressing that "the additional hike is vital for us to keep supply flat products smoothly." But market participants canvassed by Mysteel Global were not impressed that the steel giant had hiked spot prices for two consecutive months and each time by a large margin.

The price increases will apply to Nippon Steel's hot-rolled, cold-rolled, pickled and oiled, and galvanized coils and sheets. The company is adding Yen 10,000/t for its hot-rolled coil (HRC) and sheets and Yen 15,000/t for other products. The official said the hike margins differ to reflect the supply-demand balance for each product.

A Tokyo-based distributor expressed concern about the additional hike, claiming Nippon Steel's previous increase is yet to be fully digested. "We have never experienced such rapid and large price increases and I wonder how we can transfer the increment to our sales prices," he lamented. The price increase by distributors will have to be executed in stages, he grumbled, but still considerable time will be needed to complete passing the producers' rises on to buyers.

Nippon Steel had added Yen 10,000/t to its sheet prices for current month shipments, and with its latest decision, the steelmaker's total increase since October 2020 shipments has reached Yen 40,000/t for HRC and sheets, and Yen 45,000/t for other sheets products, Mysteel Global notes.

Nippon Steel does not disclose its list prices, but as of April 28, deals for SS400 grade 1.6mm thick HR cut sheet (913×1,829mm) were being transacted in Tokyo at Yen 83,000-87,000/t, while those for SPCC grade CR cut sheet (914×1,829mm) were being done at Yen 102,000-106,000/t, both up Yen 3,000/t and Yen 5,000/t on month respectively, market sources said.

A second Tokyo-based distributor was troubled by the difference in the size of the rises, pointing out that generally speaking, most market participants estimate that the price gap between HR cut sheet and CR cut sheet should be around Yen 9,000-10,000/t but with Nippon Steel's decision, the spread will widen to Yen 14,000-15,000/t.

A flat steel trader in Tokyo also maintained that Nippon Steel was aggressively pursuing higher prices to push Japanese flat prices up to match overseas prices. "Japanese export offers for HRC have already reached $1,000/t CFR for Asia for June shipment, which I estimate to be Yen 10,000-12,000/t higher compared to the actual sales prices that domestic buyers are paying. That's why Nippon Steel is rushing to lift domestic market prices, so they can more concentrate on domestic supply," he explained.

"Overseas flat prices are still trending higher (so) Nippon Steel may lift prices even further," he warned.

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

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.