Tokyo Steel rolls over product prices - again

By rolling over its prices, Tokyo Steel will continue to offer its 1.7-22mm SPHC-grade hot rolled coils at Yen 107,000/t ($677/t), its 9-19mm chequer plate at Yen 116,000/t and its 13-25 mm diameter rebars at Yen 98,000/t, Mysteel Global notes.

In the statement, Tokyo Steel noted that demand for its H-beams, sheet piles, rebars and other construction steel items is still dull as the lack of building workers and shortages of construction-related equipment are hampering building activity, especially on small and medium-sized buildings.

"Although there is a desire of owners to place orders, it takes time to materialize them, and the cargo movement of building materials has stagnated nationwide," the company said.

Data released by Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) showed that during May, construction starts on steel-framed structures nationwide dipped by 4.1% on year to 2.76 million sq metres and made for the second successive on-year decline, while those on reinforced concrete structures reached 1.85 million sq m, lower by 8.7% from May last year and the first drop in two months.

"However, civil engineering-related demand, particularly for public infrastructure construction, has remained resilient," Tokyo Steel said, adding that "new projects have been received by construction companies in the private sector, so it is expected that (steel) market conditions will improve."  

Releasing its forecast for steel demand for the current quarter last Friday, Japan's Ministry of Economy, Trade and Industry predicted that demand for steel products during July-September will reach 19.15 million tonnes, up 1.5% from April-June but down 5.5% from the same quarter of last year.

Tokyo Steel's reference to raw materials prices remaining high is accurate but as of Saturday, the cost the company is incurring when purchasing ferrous scrap is slightly lower than it was – after the mini-mill announced it was reducing its buying prices of all scrap grades at all works and storage facilities by Yen 500/t.

"But scrap prices remain above Yen 50,000/t and with the high distribution costs and power charges, Tokyo Steel has no plan to cut product prices even after trimming scrap prices," a Tokyo-based source explained.

After the scrap price reduction, Tokyo Steel is now paying Yen 51,000/t for deliveries of H2 grade scrap to its Tahara plant in Aichi prefecture and Yen 52,000/t for H2 trucked to its Utsunomiya works in the northern Kanto.

In any case, Japanese mini-mills including Tokyo Steel are preparing to idle facilities to conduct regular summer maintenance so domestic scrap demand is softening, Mysteel Global notes.

Tokyo Steel's August 2024 finished steel list prices (incomplete)

Source: Tokyo Steel Manufacturing

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com