Japan: Tokyo Steel to roll over steel prices in Dec'21

Japan's top electric-arc furnace steelmaker, Tokyo Steel, has decided to keep prices of all steel products unchanged for December, as per the latest price list announced on 22 Nov'21. The company rolled over prices so that the market gets one more month to fully digest its previous increases, the company said.

The base price of the December contract of H-beams is 111,000 yen ($962) and hot coils at 110,000 yen ($954). The price for H-shaped steel is at 111,000/ yen ($962), 89,000 yen ($771) for deformed steel bars, and 115,000 yen ($997) for thick plates.

The company's export contracts for hot coils was $950-1,000/tonne (t) FOB, down $50/t from the previous month, while H-beams were at the same level of $920-940/t.

China steel market bearish

The steel market in China plummeted due to real estate regulations and power shortages. Hot rolled coils offers were low at about $800/t but buyers in each country have become cautious and are refraining from buying. On the other hand, domestic demand in China has not declined, as steel makers have continued to reduce production. "We are not in a situation where the balance between supply and demand is disrupted. The decline in market conditions is also a temporary phenomenon," said Kiyoshi Imamura, Managing Director, Tokyo Steel.

Although the inventory of thin steel sheets is increasing due to the reduction in production by automobile manufacturers, automobile production is expected to recover from December, and economic activity to normalize between Jan-Mar'22.

Domestic prices of ferrous scrap is higher than exports. The company plans to produce 0.25 mn t in November. Of this, 0.09 t of H-shaped steel, and 0.11 mn t of hot coils (of which 0.025 mn t are exported).

Outlook

As capital investment is increasing due to the recovery in corporate performances, redevelopment projects will start in major cities from next year.

Domestic demand for building materials is expected to be higher from next year while supply and demand for thin plates is expected to tighten again at the beginning of next year.