Japan: Tokyo Steel keeps steel prices stable m-o-m for Nov'24 sales
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- Bids rebound in Oct'24 Kanto scrap export tender
- Weak domestic steel demand weighs on prices
Tokyo Steel, Japan's leading electric arc furnace steel manufacturer, rolled over prices of hot-rolled coils (HRCs) (1.7-22 mm) for November 2024 shipments compared to the last month. Additionally, the company has kept the prices of rebars and H-beams stable for the same period.
- HRCs (1.7-22 mm): JPY 92,000/tonne (t) ($614/t)
- Rebars (D13~25): JPY 88,000/t ($587/t)
- H-beams (100-300 mm): JPY 115,000/t ($767/t)
Factors affecting prices
1. Rebound in Kanto scrap export tender bids: The Kanto Iron and Steel Cooperative Association in Japan concluded its October scrap export tender, showing a rebound in bids, both in JPY and USD terms. Compared to September's tender, dollar-denominated bids increased by $20/t. In September 2024, auction prices had hit a two-year low, but the sharp rebound in October surprised the market, which had expected prices to stay lower, within the JPY 42,000-43,000/t FAS range.
Moreover, Japan's Tokyo Steel announced its first increase in domestic scrap procurement prices, effective 10 October 2024, following several cuts last month. The company raised prices by up to JPY 3,000/t ($22/t) across all its plants.
2. Japan's domestic steel demand: Domestic steel demand is currently low due to selective construction orders. Along with concerns about cargo movement in winter, a demand-supply gap has emerged in the market, with insufficient inventories and periodic shortages. This imbalance has led to increased demand for quick delivery of specific steel products. Notably, the market's stability will depend on future progress in public works and civil engineering projects.
Moreover, global economic concerns have eased, as recent US data shows a strong economy. This optimism has pushed up steel prices. In China, government stimulus and increasing steel prices have improved the market. Overall, the steel market is expected to recover as prices adjust and demand grows. However, it will continue to be vulnerable to global economic trends and monetary policy.
Presently, while demand for some manufacturing industries is improving, the overall market for steel products remains sluggish, especially in construction. Imported steel prices recently rose, which could help stabilise the market as domestic steel manufacturers continue to limit their supply.
3. Key global mills' steel price trends: Baosteel, a global steel giant, increased HRC prices by RMB 500/t ($71/t) m-o-m for November 2024 sales, according to BigMint's sources. Moreover, hot-dip galvanised steel prices were hiked by RMB 550/t ($78/t).
Hoa Phat Group, the leading industrial manufacturing group in Vietnam, raised its monthly HRC (SAE1006, non-skinpassed) prices by around $35/t for December 2024 shipments, sources informed BigMint. Post-revision, prices stood at approximately $550/t or VND 13,624,948/t for the southern region, excluding VAT.
Outlook
The outlook for Japan's steel market remains mixed. While domestic demand remains sluggish, rising import prices and restrained domestic supply could help stabilise the market. The recent hikes by major steel manufacturers such as Baosteel, Hoa Phat, and other global competitors are expected to further support prices. However, the market will continue to be influenced by global economic trends and monetary policy.
