Japan's plate prices to rise on active construction demand

By August 9, Japan's plate prices have been rising slowly, but improving demand from the construction sector may push the prices to rise further when the market returns from the coming holiday this week, sources shared.

As of Tuesday morning, deals for SS400 grade 19mm thick (1,524×3,048mm cut) heavy plate in the spot market in Tokyo were transacted at Yen 144,000-146,000/tonne ($1,069-1,084/t), up Yen 1,000/t on month and Yen 7,000/t higher than that of end-April, sources confirmed.

A Tokyo-based distributor attributed the recent rise basically to the previous hikes by producers, but plate demand from the construction sector - a key plate consumer in the spot market - had been inactive, and the increment was not as large as those producers' hikes.

Nippon Steel, Japan's largest integrated mill had added a total of Yen 30,000/t for April and May plate prices to spot buyers, mainly to transfer the rise in production costs and to reflect the supply tightness, as reported.

The distributor shared that overall plate supply had been tight because of active demand from long-term contract buyers including shipbuilders and machinery manufacturers, but supply in the spot market had softened because demand from the construction sector remained dull in the previous months.

"But major construction projects across Japan have started progressing and plate processors have become busier, so we expect to see more progress after the coming holiday, and plate prices will also be pushed higher," he predicted.

Japanese companies will be closed for a public holiday on August 11 and will also be traditionally closed over August 13-15 for the Bon Festival, but many are planning to close for August 11-15 or 16 for this year, Mysteel Global notes.

A construction steel trader in Tokyo believed that plate producers won't be able to allocate more products to the spot market, because they have reconsolidated their plate production facilities and now have lower plate production capacity.

"We heard that most plate producers had been operating at their full capacity and couldn't supply more for the spot market, so plate supply will be tightened in coming months when the construction sector becomes active in autumn," he predicted.

Japan produced some 4.79 million tonnes of plates over January-June, up 10.4% on year, and plate orders booked during January-May totaled 3.79 millon tonnes, up 5.8% on year, according to the latest data released by Japan Iron & Steel Federation.

Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.