Japan: Tokyo Steel keeps prices unchanged for Jan'25 sales

• Domestic steel demand shows signs of recovery
  
  
• Bids drop in Dec'24 Kanto scrap export tender
  
  

Tokyo Steel, Japan's leading electric arc furnace (EAF) steel manufacturer, has rolled over prices of hot-rolled coils (HRCs) (1.7-22 mm) for January 2025 shipments compared to the previous month. Additionally, the company has kept prices of rebars and H-beams stable for the same period.

Post-revision, prices were as follows:

• HRCs (1.7-22 mm): JPY 92,000/tonne (t) ($599/t)
  
  
• Rebars (D13~25): JPY 88,000/t ($573/t)
  
  
• H-beams (100-300 mm): JPY 115,000/t ($749/t)
  
  

Factors affecting prices

1. Kanto scrap export tender sees drop in bids: The Japanese Kanto H2 scrap export tender, which concluded recently, saw a slight drop in bids, both in JPY and dollar terms. Dollar-denominated bids declined by $16/tonne (t) compared to November's tender. The decline was attributed to weak overseas scrap demand, driven by elevated Chinese steel and semi-finished exports.

Following the Kanto tender, Tokyo Steel revised its scrap procurement prices for the first time this month. Effective 12 December, prices remained unchanged across most plants but dropped by JPY 1,000/t ($7/t) at the Kyushu plant.

2. Rebound expected in domestic steel demand: Japan's steel market, which had a slow start due to adjustments in construction orders, is now showing signs of a rebound. Indicators such as inventory shortages and increased inquiries suggest that the market has hit its low point. With cargo shipments expected to pick up and ongoing construction projects, the steel industry is poised for a potential turnaround.

3. Key global mills' steel prices show mixed trends: Baosteel, the world's leading steel manufacturer, has kept HRC prices stable m-o-m for Jan'25 sales. Notably, this stability in pricing marks a continuation from the previous revision, where tags were kept unchanged. Additionally, hot-dip galvanised prices remained flat m-o-m.

However, Formosa Ha Tinh (FHS), Vietnam's leading steel producer, has reduced its HRC prices by around $20/t CIF m-o-m, depending on the quantity booked, for early-Feb'25 sales. Post-revision, prices of HRCs (SAE1006, skin-pass) stood at $516-522/t CIF Ho Chi Minh City.

Outlook

Tokyo Steel's decision to roll over steel prices for January 2025 shipments, suggests a cautious approach amidst mixed market trends. While domestic steel demand in Japan is expected to rebound, driven by inventory shortages and increased inquiries, global steel prices show a mixed picture. As such, the outlook for Tokyo Steel's prices remains stable in the short term, with potential for upward adjustments if domestic demand continues to recover.