Sheet Steel Dealers Offer 3,000 yen/t Hot Rolled Hike in Tokyo

Sheet steel dealers around Tokyo increased the hot rolled flat steel and picking steel offer by 3,000 yen per tonne for spot based buyers. They try to pass higher cost price when Tokyo Steel Manufacturing announced 3,000 yen of price hike for October order last week. Domestic integrated steel makers try to push the higher price to the dealers in October-December while they couldn’t get full scale price hike despite of the announcement. The sheet steel market price shows sign to hit bottom mainly for hot rolled products in the dealers’ market.

The domestic demand is expected to recover for automobile and construction in second half of fiscal 2011 ending March 2012. Domestic automakers plan high level production as before Lehman shock to recover production loss in earlier the year du to parts shortage after the major earthquake.

Domestic construction demand also increases when major redevelopment projects restart the activity around Tokyo while those projects delayed after the quake. The dealers’ selling price shows sign to rebound after Tokyo Steel’s 5,000 yen per tonne hike announcement.

The dealers’ selling price is 65,000-66,000 yen per tonne for hot rolled flat steel around Tokyo. The major dealers increase loss making transaction when the cost price increases. A dealer source said 3,000 yen higher reselling price is not enough and indicates additional price hike attempt. The dealers are reluctant to offer higher price for cold rolled flat and coated steel when the import price is lower under high yen rate. However, the dealers decided to realize higher price for hot rolled and pickling steel for better profitability. They could offer higher price in October.