Japan: Tokyo Steel rolls over finished long prices for Sept'21 delivery

Japanese EAF steel major, Tokyo Steel, has announced a roll-over of its finished long steel prices for Sept'21 deliveries.

• H-beam prices are at JPY 106,000/t ($970/t)
  
  
• Prices of steel bars, including re-bar, are at JPY 86,000/t ($787/t).
  
  
• Hot-rolled coil (HRC) price are unchanged at JPY 110,000/t ($1,006/t)
  
  

However, the manufacturer has raised pickled and oiled sheets prices by JPY 3,000 ($27/t) due to supply shortage and low inventory of sheet products. The effective price stands at JPY 126,000/t ($1,153/t) for Sept'21 delivery.

Factors driving the prices

1. Increase in production: Crude steel production to jump by 30% y-o-y to 24.67 million tonnes in Q3CY'21 as against 18.98 mn t seen in the same-period last year, according to Japan's Ministry of Economy, Trade and Industry (METI). Thus, increased production and dull domestic demand kept prices unchanged

2. Dull domestic demand: Currently, the construction and manufacturing sectors' demand remains dull due to the pandemic. Thus, prices remained largely stable.

3. Slow economic recovery: A spike in Covid cases and relatively slow progress in the vaccination drive have weighed on Japan's economic growth. Since mid-June, Covid cases are rising, resulting in dull demand for steel products from the downstream sectors.

4. Limited exports: Countries like Vietnam and others started preferring domestic HRCs because of price competitiveness. Exports of HRCs in H1 to China dropped 5.5%, to South Korea by 37%, to Vietnam by 33% and to India and the Philippines by 43% each. Lesser exports in turn kept domestic prices largely stable.

Outlook

"We anticipate increased production activity in the automobile, industrial machinery, shipbuilding and other manufacturing industries in the October-March period, and expect the market will stay tight," Tokyo Steel said in a statement.