Major Asian steel mills to hike flat steel prices in Jan'23 on rising cost pressure

Leading Asian steelmakers are likely to hike steel prices in Jan'23, as per Japan Metal Daily reports.

China's Baoshan Steel has changed its sales policy to ensure profitability which has been affected by the zero-coronavirus policy imposed by the government. The company has decided to increase both domestic as well as global steel prices in January 2023, as prices have fallen to even below their production costs and are less likely to drop from the current levels. Notably, raw material prices have been on the rise since the past few weeks. For instance, imported iron ore prices into China have increased by $20-25/t m-o-m.

The Japanese market is overpriced compared to global prices. Hot-rolled coils in Japan have been at the $500/t levels, and are expected to rise even higher to $600/t as raw material prices have rebounded.

As the depreciation of yen has eased, the sense of undervaluation of imported material has increased. However, shipping demurrage has not yet been resolved, and problems with logistics costs and delivery times have become bottlenecks to expanding sales in the Japan market.

The yen has fallen to over 150 against the US dollar at times, but it appreciated to around 136 recently. The unstable exchange rate trends are also a concern.

Vietnam's Formosa Ha Tinh Steel (FHS) may also raise HRC offers. The global hot rolled coil market is rebounding after bottoming out in November. Although there are concerns about inflation, rising interest rates, and seasonal periods of low demand, the biggest change is the improvement in market sentiment in China. The uncertain factors will always remain in the market, but the relief over China's zero coronavirus policy has increased the upswing in prices for Chinese manufacturers.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.