More Japanese mills hike steel prices but NSC holds

More Japanese steelmakers announced Wednesday that they intend to raise finished steel prices to offset higher costs for raw materials, labour and logistics, but Nippon Steel surprised market watchers by deciding to wait.

JFE Steel, Japan's second-largest integrated steelmaker after Nippon Steel, declared that from the start of Japan's new fiscal year in April, it will be raising prices of all products by an average of Yen 10,000/tonne ($66/t), arguing that amid the overall climb in production costs, "there is a limit to how much we can reduce costs through self-help efforts."

The increases are to be applied to all steel items JFE sells to long-term contract buyers such as car makers and appliance manufacturers, to spot market sales to distributors and coil centres, and covers domestic as well as export customers.

In statements to Japanese industry media, JFE stressed that to maintain stable production of steel products and stable supplies to consumers, the price increase "is essential to ensure an appropriate level of profit".

This across-the-board increase is JFE's first in 22 months since June 2022, though during the current half of Japan's fiscal year, the company's cumulative price increase has reached Yen 20,000-25,000/t, Japan's Sangyo Shimbun noted.

JFE's announcement followed that on Tuesday of the country's largest rebar producer, Kyoei Steel, that it was lifting its domestic rebar prices by Yen 3,000/t for sales to distributors in March, also to offset higher costs. The rise will take the mini-mill's price increase total so far this year to Yen 6,000/t, as Mysteel Global reported.

Also on Wednesday, ERW pipe maker Daiwa Steel Pipe Industry, based in Tochigi prefecture north of Tokyo, announced that it was raising prices of a wide range of its pipes including hot-dipped galvanized and agricultural pipes by Yen 10,000/t for March contracts, also citing rising costs.

Another price-policy announcement issued Wednesday bucked the increase trend, however, with Nippon Steel advising building contractors and distributors handling its H-beams that it would hold prices for February contracts (March roll), explaining that it wanted to gauge the extent to which its previous rise had penetrated the market. Last month, Nippon Steel had said it was raising its prices of H-beams rolled during February by Yen 5,000/t, its first increase in 10 months, as reported.

The integrated giant's decision to hold prices this time could be related to the fact that as of end-January, H-beam stocks held by its Tokiwakai grouping of domestic H-beam dealers nationwide had swollen by 2.8% from end-December to 207,900 tonnes and making for the third consecutive monthly rise. Daily shipments by Tokiwakai members during January also slipped slightly to 3,300 tonnes, a slight decrease of 200 tonnes/day from the December average.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.