Nippon Steel to Hike Sheet Steel by 5,000 yen/t for Rerollers

Nippon Steel announced on Wednesday the firm increases the selling price of sheet steel products including hot rolled, pickling, cold rolled and coated steel by 5,000 yen per tonne for processors including relloers, pipe makers and forming makers for February order. The firm already started the negotiation with the buyers. The firm also increases the sheet steel selling price by additional 5,000 yen for distributors for February or total 10,000 yen in January and February orders.

The market price of sheet steel processed products including column and small diameter square pipe is still low level due to severe competition under slow domestic construction market. The processed steel makers suffered from lower demand and lower price. Some processors including Maruichi Steel Tube and Kyoei and Kyoei Kenzai already announced price hike. Nippon Steel’s price hike would encourage such price hike by processed steel makers.

Nippon Steel decided the price hike when Asian market price surges and domestic demand is firm for manufacturers. The firm also sees domestic building demand is still low level but recovers gradually. The firm expects tighter supply could support the price hike.

The firm also tries to pass higher cost for raw material and energy when the firm couldn’t cover all of the cost increase since April 2010. The firm tries to secure needed margin to keep sustainable operation when the firm has to secure additional coking coal at higher priced spot market due to heavy rain impact on Australian coal chain.

Quarterly cost of iron ore and coking coal should increase in April-June when the spot market price increases. Some market watchers expect coking coal price could increase by more than 30% from January-March level. Such higher quarterly price could increase integrated steel makers’ cost by more than 10,000 yen per tonne for steel products. Nippon Steel eyes additional price hike depending on the raw materials situation. The steel price level is expected to increase more by the higher cost for raw materials.