Japan: Tokyo Steel keeps steel prices unchanged for Aug'23 deliveries

Tokyo Steel, Japan's top electric arc furnace steelmaker, has kept steel prices unchanged m-o-m for August 2023 sales, as per the latest price list unveiled today. Last month the steelmaker had slashed HRC offers by JPY 10,000/t and rebar prices by JPY 5,000/t.

Effective prices:

• HRC (1.7-22mm): JPY 105,000/t ($759/t)
  
  
• Rebar (D13~25): JPY 98,000/t ($708/t)
  
  
• H-beam (100-300mm): JPY 127,000/t ($918/t)
  
  

Factors supporting prices:

Global cues

Vietnam's Formosa Ha Tinh (FHS) has further raised monthly HRC (SAE 1006, skin pass) prices for August by $10-15/t CIF m-o-m. Post revision, prices are in the range of $595-615/t CNF, depending on the quantity of purchase.

The world's largest steelmaker, Baosteel, has raised hot-rolled coil (HRC) prices by RMB 100/t ($14/t) m-o-m for August sales.

Optimistic outlook for Japan's steel industry

Japan's Ministry of Economy Trade & Industry (METI) expects that crude steel production will be around 22.31 million tonnes (mnt) in July-September, 2023, which is an increase of 2.2% compared to the same period last year. The demand for steel materials in the July-September period is likely to be 20.37 mnt, up 0.9% y-o-y. Sales for construction (construction and civil engineering) will increase by more than 4% compared to the previous quarter. On the other hand, the demand for steel in the industrial machinery sector is expected to weaken a bit.

Japanese steel export market

Exports remained highly range-bound despite lack of domestic demand as well as drop in crude steel production. Output in Japan was down 5.3% in January-May. Still, exports did not exactly fall, primarily because mills deal in long-term contracts rather than spot trades.

Raw material prices remain supportive

In Japan's Kanto Tetsugen scrap export tender for July, bid prices increased by JPY 1,573/t FAS ($11/t) compared to the previous month, marking the second consecutive increase after several rounds of declines since March.

Following the Kanto tender results, Tokyo Steel reduced its domestic ferrous scrap procurement prices by JPY 1,500/t ($11/t) in Utsunomiya. Scrap purchase prices in Tahara increased by JPY 500/t ($4/t), while in Okayama they were up by JPY 1,000/t ($7/t). The new prices will be effective from 12 July.

After the revision, prices for H2 scrap at respective plants are as follows:

Tahara: JPY 49,000/t ($354/t), up JPY 500/t ($4/t)

Okayama: JPY 49,500/t ($357/t), up JPY 1,000/t ($7/t)

Utsunomiya: JPY 50,000/t ($361/t), up JPY 1,500/t ($11/t)