Japan Steel Market Price Rises for All Items

Japanese steel market price increases for all items recently. The price increased for shapes and sheet steel and shows sign to increase for plate, steel pipe and processed steel products when domestic electric furnace and integrated steel makers announced price hikes to cover higher cost for raw materials. The makers would increase the price in and after April when cost for iron ore and coal cost should increase in April-June. The domestic steel market price could reach historical high level.

The makers increased the selling price to cover higher cost for iron ore, coal and ferrous scrap. Nippon Steel announced price hike for sheet, plate, shapes and pipe. The firm increases the sheet price for distributors for 2 months in a row through February order. Japanese integrated steel makers usually improve the price level gradually. The price hikes for 2 months in a row apparently represent emergency for raw material situation.

Tokyo Steel Manufacturing and other electric furnace steel makers increase the selling price one after another to cover higher cost for scrap. Other processing makers, pipe makers and wire drawing makers also increase the selling price in February.

With the makers’ price hike, the dealers try to increase the reselling price. The market price increased by 4,000-5,000 yen per tonne for sheet steel and by around 10,000 yen for H-beam in January while plate dealers also reduce low price transactions. The dealers get more orders from buyers for pipe and wire processed products when the prices are expected to increased by the makers. The price increase is supported the market mood when the domestic demand recovers for manufacturers and construction and Asian market price surges.

Steel raw materials cost increase could be wide in April-June. Domestic steel makers are expected to increase the steel selling price additionally in and after April. Depending on price hikes, the steel market price could reach historical high. However, the buyers would resist wide steel price increase and could shift alternative materials. The dealers’ profitability could be squeezed by higher cost price and slower reselling price increase along with higher risk for unrecoverable account receivable in fiscal 2011 starting April.