Japan: Tokyo Steel reduces steel prices m-o-m for Oct'24 sales

Tokyo Steel, Japan's leading electric arc furnace steel manufacturer, has reduced its hot-rolled coils (HRC) (1.7-22 mm) prices by JPY 15,000/tonne ($107/t) m-o-m for October 2024 shipments. Additionally, the company has dropped prices of rebar and H-beam by JPY 10,000/t ($71/t) and JPY 12,000/t ($85/t) during the same period.

• HRC (1.7-22mm): JPY 92,000/t ($654/t)
  
  
• Rebar (D13~25): JPY 88,000/t ($626/t)
  
  
• H-beam (100-300mm): JPY 115,000/t ($818/t)
  
  

Factors affecting prices:

1. Kanto scrap export tender bids down for Sept'24: The Kanto Iron and Steel Cooperative Association in Japan concluded its September scrap export tender showing a decline in bids in terms of JPY. Similarly, bids in dollar terms dropped by $23/t m-o-m to JPY 42,720/t ($303/t) FAS, from August's price of JPY 47,956/t ($326/t). The tender captured a volume of 15,000 t.

Moreover, Japan's Tokyo Steel announced its seventh consecutive cut in domestic scrap procurement prices today, reducing rates by up to JPY 1,500/t ($11/t), effective 14 September, 2024. The total decline for September now stands at JPY 4,000-5,000/t ($28-35/t), with H2 prices ranging within JPY 40,000-42,000/t across plants. The ongoing price reductions can be attributed to high inventory levels and weak demand.

2. Japan's domestic steel demand: The construction industry is showing signs of recovery with increasing inquiries for new properties. However, the demand for steel products remains sluggish due to rising procurement costs and limited construction capacity. Construction companies are selectively pursuing projects, leading to a softening trend in the domestic market since September.

The decline in the international market has also increased supply of imported steel materials and frames. While there are hopes for a recovery in construction demand for certain product types in the second half of the year, regional disparities in supply and demand are widening, further driving the market downward.

Furthermore, the Japanese yen has experienced a remarkable recovery, climbing from below 150 to around 140 levels against the US dollar. This surge in the yen's value is impacting pricing decisions across various markets.

3. Key global mills' steel price trend: Baosteel, world's leading steel manufacturer, has kept HRC prices stable m-o-m for October, 2024 sales. Worth mentioning here that prices declined for two months. Moreover, hot-dip galvanized prices also remained flat.

Hoa Phat Group, the leading industrial manufacturing group in Vietnam, reduced its monthly HRC (SAE1006, non-skinpassed) prices by around $15/t for its October-November, 2024 sales, sources informed BigMint. Post-revision, prices stood at approximately $515/t or VND 12,870,000/t for the southern region, excluding VAT. The company reduced its prices in response to weakening domestic demand and competition from Chinese imports.

Outlook

Japan's steel industry faces a challenging outlook, primarily driven by global economic uncertainties and competitive pressures. The recent softening of the domestic steel market, coupled with increased imports from Asia, poses significant pressure on the steel sector. While there are hopes for a recovery in construction demand, the market remains volatile and regional disparities persist.