Taiwan's CSC lifts flat steel export prices to Japan by $47/t

Taiwan's top steel producer and one of major carbon steel exporters to Japan, China Steel Corp (CSC), will lift its export offering prices to Japan for October-December shipments by at least Yen 5,000/t ($47/t) for all flat products including hot-rolled and cold-rolled coils, and plates mainly because of their higher production costs, a CSC official in Osaka confirmed on September 3.

CSC's flat steel price hike to Japan has been the first time in nearly two and a half years, the official confirmed, explaining that the steel prices elsewhere in the world have been recovering recently on the restart of industrial activities and the remaining bullish demand from China.

"No price increase has materialized in Japan, but we need to raise the prices so as to keep supplying to our Japanese customers," he added, disclosing that CSC has aimed to raise its SS400 grade HRC exports prices to $500/t FOB by the third quarter, and so far most of customers in China and Southeast Asia have agreed on, but not the Japanese buyers.

"Roughly, we are still selling to Japan at below $470-480/t FOB Taiwan, and it has to be adjusted higher, and now we need to prioritize on price adjustments, hope the Japanese buyers understand," he said.

CSC will increase the export offering prices to Japan by Yen 5,000/t for most of its products, but for those with prices way below the market level, the hike will be Yen 6,000/t or more to reach the reasonable level.

An Osaka-based trader agreed on CSC's observation, noting that carbon steel flats prices in Japan has been stuck lower than the other countries, which "must be a headache for overseas suppliers", though the latest hike may also discourage the Japanese steel importers.

"Japan's domestic steel prices were usually Yen 3,000-5,000/t higher than imported cargoes before the virus outbreak, but now the price of imported materials are above the domestic supplies, I wonder whether the Japanese buyers are still keen to import now that the price merit is gone," he said.

Japan's domestically-produced SS400 grade HRCs are transacted at around Yen 60,000-62,000/t including the delivery, or Yen 1,000/t lower than the imported materials, he added.

For now, no other overseas steel mills have adopted a similar move yet, but the CSC price rise may well inspire the others such as South Korea's Posco, another key exporter to Japan, to lift their prices too, according to a Tokyo-based trader.

Besides, "the price hikes by CSC may prompt the Japanese steel mills to raise their domestic sales offering prices, as they have also been suffering from higher input costs, only waiting for the right timing to do so," he added.

In July, Japan imported 40,287 tonnes of HRCs from Taiwan, down 16.4% on year and 11.9% lower on month, and over January-July, the volume added up to 324,120 tonnes, up 2.1% on year, according to the latest data by the Japan Iron & Steel Federation, the delivery lead time is usually about two months after the booking, Mysteel Global understands.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.