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

Tokyo Steel, Japan's top electric arc furnace steelmaker, has kept steel prices unchanged m-o-m for September 2023 sales, as per the latest price list unveiled today. Last month, the steelmaker had kept HRC and rebar prices unchanged.

Effective prices:

HRC (1.7-22mm): JPY 105,000/tonne (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
The Japanese steel major has kept its prices unchanged lending more time to the market to absorb the prior increase. On the other hand, steel mills across the globe have increased their monthly sales prices in the domestic market, this has lent some support to the Japanese market sentiments. For instance, the world's largest steel maker, Baosteel (China), has raised HRC prices by RMB 100/t ($14/t) m-o-m for September sales.

Meanwhile, Vietnam's Formosa Ha Tinh (FHS) had increased its domestic HRC (SAE1006, skinpassed) prices by $20-25/t to $627-630/t CIF Ho Chi Minh City (HCMC) for September and early-October sales earlier this month. However, the company has recently revised the same to $610/t CIF HCMC, down by $15/t.

Optimistic outlook for Japan's steel industry

Crude steel production in Japan is projected to increase by 1.9% y-o-y to 22.23 million tonnes (mnt) in the July-September period. This would be the first y-o-y increase in seven quarters. The growth is driven by a moderate recovery in automobile demand and higher exports. However, there is an uncertainty about exports, especially due to China's economic slowdown. Additionally, production of ordinary steel products is expected to increase by 4.9%, with a 2% rise in domestic production and a 16.6% increase in exports. Construction steel production may slightly decrease due to the weak construction sector.

Japanese steel export market

Steel exports from Japan increased by 12.2% y-o-y to 2.75 mnt in July, marking the first increase in two months and the first double-digit growth since December 2021. While the overall increase in steel exports is positive for the Japanese steel industry, the ongoing decline in exports to important markets is a concern.

Raw material prices remain supportive

In Japan's Kanto Tetsugen scrap export tender for August 2023, bid prices were stable.

Following the Kanto tender results, Tokyo Steel kept its domestic purchase prices unchanged from last one month. After the last revision followed by last month's Kanto tender outcome, the purchase prices were as follows:

• Tahara at JPY 49,000/t ($349/t)
  
  
• Okayama at JPY 49,500/t ($352/t)
  
  
• Utsunomiya at JPY 50,000/t ($356/t).