Japan Construction Steel Price to Rebound

Japanese integrated and electric furnace steel makers try to increase the steel selling price for domestic buyers to cover higher cost for raw materials including iron ore, coal and ferrous scrap. The attempt could change the domestic market mood while the market price has been weak for months due to slow demand.

Nippon Steel notified H-beam dealers of 3,000 yen per tonne hike for December order. The dealers will get the higher priced beam in mid-January. JFE Steel also announced 3,000-5,000 yen of steel price hike for January-March from October-December level.

Electric furnace steel makers also try to increase their selling price. Tokyo Steel Manufacturing increased the price of concrete reinforcing steel bar and wire rod by 2,000 yen per tonne for the dealers for December order. Other electric furnace steel makers also increased the price for angle, channel and rebar. With the price hikes, the market price turned into increase and the price is expected to keep firm under higher price trend for scrap and iron making raw materials.

Japanese construction steel demand is very slow due to slow investment by private sector after Lehman shock and lower public budget for civil works. The demand is seasonally lower in January-March but the steel makers try to increase the steel price to cover higher cost.

A major dealer said the dealers cannot buy steel products from the makers when the dealers’ shipment is very slow. Some of the dealers show resistance for the price hike under the slow demand.

Japanese H-beam inventory held by the dealers hit record low in November and the dealers’ inventory adjustment progresses for construction steel products. The dealers have some stock out sizes due to low level inventory. Such dealers have to buy higher priced products from the makers to keep the sales resource. The cycle could lift the domestic steel market price as early as in January.