FLASH: Tokyo Steel cuts prices of almost all products for October sales

No doubt to the fury of its domestic competitors, Tokyo Steel Manufacturing, Japan's largest independent mini-mill, is cutting prices of almost its entire product catalogue for October sales by Yen 3,000-12,000/tonne ($20-82/t), the company said in its monthly price policy announcement on Tuesday morning.

Prices of long products such as H-beams, I-beams and sheet piles have been lifted by Yen 12,000/t, while those of flat products including hot-rolled coils, angles and channels and rebars have been raised by Yen 3,000/t, according to its announcement. Only prices of square pipes and galvanized sheets have been rolled over from prevailing levels.

Consequently, Tokyo Steel's price for 1.7-22mm SPHC-grade hot rolled coils is now at Yen 86,000/t, that of base-size D13-D25 rebars also dips by Yen 3,000/t to Yen 82,000/t, while prices for all sizes of its Universal plates are Yen 12,000/t cheaper at Yen 112,000/t.

In a statement, Tokyo Steel gave no clear explanation for its huge reduction. Indeed, while acknowledging that business conditions at home and abroad were still hard, it remained generally optimistic that signs of improvement were emerging. Only in its conclusion did it give a hint.

"The manufacturing costs of steel manufacturers continue to remain high and making profits is very difficult, but in order to bottom out the market in the future, we will review this month's sales price in line with the actual market conditions for each product type and revise it to the appropriate price," the company said.

Translated, Tokyo Steel suspects that other makers and dealers are secretly discounting and so to punish such behaviour, it is slashing prices to create a floor price – an "actual market level" – from which (it hopes) prices can steadily rise.

Tokyo Steel's decision will infuriate other mini-mills and steel traders that have been trying to lever prices higher in recent weeks, as Mysteel Global has reported. Osaka-based mini-mill Kyoei Steel, Japan's largest rebar maker, will be particularly annoyed: Kyoei last Thursday announced that it was raising prices of its rebars at all its works by Yen 5,000/t, effective immediately, as reported.

The same day, Himeji-based mini-mill Yamato Steel in western Japan announced that it would be lifting the prices of its H-beams and other sections items for October sales by Yen 3,000/t.

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

Edited by Alyssa Ren, rentingting@mysteel.com