Tokyo Steel’s Price Cut to Impact Flat and Long Product Market Prices

Japanese steel dealers are concerned market prices would decline for flat and long products since Tokyo Steel Manufacturing, Japanese largest electric furnace steel maker, announced wide-range price cut for July contracts. A steel sheet dealer said their order receipt may decrease before July and low demand would cause market price down. An integrated steel maker source said iron ore and coal costs are significantly increasing even though Tokyo Steel lowers the selling price. Tokyo Steel’s announcement should also impact steel sheet price negotiations between integrated steels and large-lot users.

Steel plate market price is also concerned to weaken. Tokyo Steel’s price cut range was wider than plate dealers’ expectations while integrated steel makers’ plate selling price is likely to surge more. As to cut processed materials, price gap is likely to widen between integrated steel makers’ products and others’. A shearing processor said reselling price of cut processed materials might not reach 100,000 yen per tonne.

H-beam dealers are cautious about dropped market price by Tokyo Steel’s price cut around Tokyo. Some dealers are worried that other dealers reduce selling price in low sales.

H-beam market price is presently 81,000-83,000 yen per tonne, higher by 10,000 yen than Tokyo Steel’s selling price. Meanwhile, Japanese integrated steel makers plan H-beam price hike. Wholesalers are unwilling to lower the reselling price to keep profitability.

Rebar market price would drop more. A major rebar dealer said Tokyo Steel’s announcement has a large impact on rebar market though dealers had assumed the price cut. Dealers are concerned about order receipt decrease when market price is in strong downtrend. Rebar market price is presently 68,000 yen around Tokyo but may represent below 60,000 yen.