JFE Steel to Hike Sheet Steel by 20,000 yen/t in April

JFE Steel announced on Wednesday the firm increases the selling price by 20,000 yen for hot rolled, cold rolled and coated flat steel for distributors, pipe and reroll makers and drum can makers for April shipment. The firm started to notify the buyers of the hike on Tuesday. The firm decided the wide price hike to cover higher cost when iron ore and coking coal cost should increase widely for April-June period and the firm cannot pass current higher cost on the steel price while the firm tries to minimize the impact through own cost down effort.

Iron ore and coking coal spot price surged since December 2010 partly due to bad weather in Australia. JFE Steel expects iron ore quarterly price based on the spot market price index would increase to record US$ 170-180 per tonne for April-June, which is around 30% higher than January-March level.

Anshan Iron and Steel of Chinese increased sheet steel export price to Japan for 3 months in a row and Tokyo Steel Manufacturing increased the price for 3 months in a row under higher raw materials cost. Nippon Steel already announced price the hike for distributors for January and February and for rerollers for February. Offshore market price is approaching to FOB US$ 1,000 per tonne for hot rolled coil.

JFE Steel sees Japanese steel demand is firm for manufacturers while the construction steel demand is same level as last year when nonresidential building start recovers gradually. Japanese sheet steel market price increases step by step with pressure by the makers’ price hike. However, the market could take time to reflect the higher cost price depending on yen rate, import volume and users’ activity while steel demand is still very slow in rural parts of Japan.