Japan Hot Rolled Sheet Price Hits Bottom

Japanese hot rolled sheet steel market shows sign to increase for the first time in a year. The dealers try to increase the reselling price under tight supply and higher Asian market. Sumitomo Corporation’s processing subsidiary in Osaka announced the 2,000 yen per tonne hike and Sumikin Bussan Corporation, which is trading firm of Sumitomo Metal Industries group, increases the price by 2,000-3,000 yen around Tokyo and Osaka in the month. The other dealers are expected to follow the move. Hot rolled coil supply gets tighter due to major maintenance outage by POSCO of South Korea. Chinese market price increased by more than 300 yuan per tonne since mid-August though Baoshan Iron and Steel increases the hot coil price by 200 yuan per tonne for October-December. Japanese steel makers also increase the export price for Asia. Japanese hot rolled sheet price was weak earlier the year due to slower demand for building and construction materials. The market price decreased by 2,000-3,000 yen per tonne during the period. However, offshore makers increased the export price to Japan by US$ 30-50 per tonne in past 6 months. The higher cost price pressures the dealers to increase their reselling price. Japanese integrated steel makers reduce the shipment for dealers to reduce the inventory and ship more for manufacturers. The dealers’ inventory gets lower and some dealers report some stock out sizes. The demand also improves for building mainly in urban areas.