Tokyo Steel Surveys Market Condition with Keeping Sales Prices for December

Tokyo Steel Manufacturing announced on Monday the firm raised the selling price of rebar and wire rod by 2,000 yen per tonne for December contracts with distributors while set other products prices unchanged. Mr. Naoto Ohori, managing director of Tokyo Steel, explained it is hard to raise the selling price when the demand levels off though the firm considered price hike to reflect higher ferrous scrap cost. Mr. Ohori indicated price hike for January contracts. The firm raised rebar and wire rod prices since both prices were too low.

Mr. Ohori said the reason is unclear why ferrous scrap market price rises despite of weak steel product market. Tokyo Steel’s steel output is expected to be 180,000 tonnes in November, lower than previously planned 200,000 tonnes due to less order receipt and difficulty in scrap procurement. The production is estimated at 75,000-76,000 tonnes for hot rolled coil, 60,000 tonnes for H-beam and 30,000 tonnes for plate.

Tokyo Steel couldn’t contract export order since export market price was low and yen exchange rate maintained high level. The firm’s offer price is FOB US$ 670 per tonne for hot rolled coil and US$ 750 for H-beam, almost as same as in the previous month. International market price is US$ 550-560 for hot coil.

One steel sheet distributor commented Tokyo Steel was supposed to raise the steel sheet selling price by 3,000-5,000 yen to reflect higher ferrous scrap price. Most dealers expected for Tokyo Steel’s price hike. Meanwhile, another dealer said Tokyo Steel’s price policy is appropriate since ferrous scrap price may downturn within this year.

Plate dealers recognize it is adequately expected that Tokyo Steel set the price unchanged when the demand is slowing down. Shaped steel dealers also suppose the price announcement was mostly appropriate. One dealer said the market price can’t upturn if the firm raised the selling price by 2,000-3,000 yen per tonne.