Japan: Tokyo Steel rolls over steel prices m-o-m for Sep'24 sales

Tokyo Steel, Japan's leading electric arc furnace steel manufacturer, has maintained its HRC (1.7-22 mm) prices unchanged m-o-m for September 2024 shipments. Additionally, the company has kept prices stable for rebar and H-beam during the same period.

• HRC (1.7-22mm): JPY 107,000/t ($730/t)
  
  
• Rebar (D13~25): JPY 98,000/t ($669/t)
  
  
• H-beam (100-300mm): JPY 127,000/t ($867/t)
  
  

Factors affecting prices:

1. Kanto scrap export tender bids up for Aug'24: The Kanto Iron and Steel Cooperative Association in Japan concluded its August scrap export tender, witnessing a drop in bids in terms of JPY. However, the actual bid price in dollars increased by $3/t to $326/t from July ($323/t). In JPY bid price decreased by JPY 4,212/t, reaching JPY 47,956/t FAS, compared to JPY 52,168/t in July. The tender captured a volume of 15,000 t of H2 scrap.

Moreover, Tokyo Steel recently announced a reduction in its scrap procurement prices across all grades, effective from 6 August, 2024. The company lowered prices by JPY 2,000/t ($14/t) at its Tahara plant, JPY 2,500/t ($17/t) at Utsunomiya, and JPY 1,000/t ($7/t) at Okayama, setting the new price at JPY 47,500/t ($325/t) across all plants.

2. Sluggish demand in Japan: The construction sector remains weak due to sluggish domestic demand and labour shortages caused by extreme heat, leading to reduced cargo movement of construction materials nationwide. However, demand for large H-beams remains steady, and with upcoming public works projects, inquiries for steel materials are on the rise. While overall market conditions are lacklustre, they are expected to improve in the second half of the year if construction demand recovers.

3. Key global mills' steel price trend: Baosteel, the world's top steel manufacturer, has decreased HRC prices by RMB 100/t ($14/t) m-o-m for September sales, following a similar reduction in August. This price cut is driven by subdued domestic demand and a significant drop in global steel prices.

Additionally, Vietnamese steel giant, Formosa Ha Tinh (FHS) has reduced its HRC prices by approximately $40/t CIF m-o-m for shipments scheduled in September and October 2024. Current prices of SAE1006 skin-pass HRCs now range between $528-540/t CIF, Ho Chi Minh City (HCMC).

Furthermore, Taiwan's China Steel Corporation (CSC) has lowered steel prices m-o-m for September sales, with prices for HRC and HR plates reduced by TWD 600/t ($19/t).

Outlook:

Tokyo Steel is maintaining a cautious stance by keeping prices steady as it closely monitors domestic and global market conditions. The company plans to adjust production in line with demand to balance supply and consumption.