Higher H-Beam Market Price in Tokyo, Osaka

H-beam market price is increasing in Tokyo and Osaka. The price reached 80,000 yen per tonne around Tokyo and 78,000 yen around Osaka. The price is likely to increase more while the price increase could slow after Tokyo Steel Manufacturing’s additional price hike was smaller at 3,000 yen than expected.

The dealers around Tokyo offer 83,000 yen per tonne recently. They try to pass higher cost price on the reselling price. Their order receipt increased from end of December to mid-January when the buyers expected higher price. The order is lower level recently when the price increase pace is slowed.

The dealers around Tokyo try to increase the reselling price under the low level inventory when the makers announced the price hike one after another. The price already increased by 10,000 yen per tonne from the recent bottom while Nippon Steel increased the selling price by total 13,000 yen. The dealers could take time to get higher price under the slow demand.

Domestic construction market is improving but the increase is only around 10% than a year earlier level. The demand is expected to keep low level. Some dealers anticipate higher price could increase the risk for unrecoverable accounts receivable. The dealers’ profitability could be squeezed under the market condition while the makers would try to pass the higher raw materials cost.

The market price increased by 3,000 yen per tonne recently around Osaka. The price increased by total 8,000 yen in the month. The dealers try to increase the reselling price to cover higher cost price.

The dealers get certain level of order receipt while the inventory building demand in late 2010 reduces the transaction volume. Local dealers’ inventory increased by 9.8% to 34,600 tonnes at end of December from November, according to Tokiwa-kai, which is the distributors’ group dealing Nippon Steel’s products. The dealers report, however, the inventory is tight especially for some sizes including product with 150 by 75 millimeters width.

Osaka area’s major makers including Sumikin Steel & Shapes and Yamato Steel announced the price hike for February. The price hikes increase expectation for higher price. The dealers’ higher offer is accepted by the buyers at higher pace. The market price would increase more when the dealers now target 80,000 yen per tonne level of reselling price.