H-Beam Price in Upward Trend around Tokyo

H-beam market price is edging upward at 62,000-63,000 yen per tonne for the base size around Tokyo. Dealers raised the reselling price to follow H-beam makers’ price hike for February contracts. H-beam makers such as Nippon Steel are likely to announce the additional price hike. The market price is expected to rise gradually.

Dealers’ H-beam inventory seems to decrease in February form the end of January. Dealers minimized the purchasing volume due to the makers’ price hike though dealers’ shipment kept low. Local demand for steel frame decreased by 46.1% to 102,457 tonnes in February from a year earlier around Tokyo.

Domestic H-beam demand is estimated to keep almost flat at around 2.7 million tonnes per year in fiscal 2010 (April 2010-March 2011) from the previous fiscal year, according to Japanese integrated steel makers. One source indicates major steel framers seem to have already accepted the orders at total 800,000 tonnes for fiscal 2010. Large building construction projects are planned around Tokyo.

Meanwhile, construction space of steel frame below 2,000 square meters decreased by 20.1% in December from a year earlier. Middle- and small-size construction projects maintain stagnant and unlikely to recover soon.

H-beam makers must raise the selling price to refelct cost upsurge for iron ore and coke. Dealers forecast the makers’ price hike but don’t increase the inventory due to low demand.

Dealers announced to raise the reselling price by 3,000 yen to 63,000 yen per tonne in February around Tokyo. They are willing to raise the price more to cover losses caused by the low price.