Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Japan-based Tokyo Steel has kept prices unchanged for its steel products for November amid weak global cues and sluggish recovery in the domestic market. Steel prices by the mill are highest in the Japanese market at present, but Tokyo Steel expects others to follow suit. 


Prices after the announcement for finished long steel bars, including rebar, are at JPY61,000/mt ex-works and JPY81,000/mt ($768/mt) ex-works for H-shaped beams. 


For October deliveries, the company had raised steel prices by 2.2-3.4pc for all steel products in line with rising global steel prices. After the last rise, however, the company decided to keep prices flat for the market to absorb these levels. 

The mill has also, for the first time since Sept 2017, raised its section prices by JPY3,000/mt ($28/mt) in the domestic market for November deliveries, to lower the gap between actual prices and those listed for the public. 

Despite a slow domestic recovery in most parts of Japan, international steel demand remains strong on the back of aggressive restocking in the Chinese market. In some Japanese markets, domestic steel inventories have dipped and supported prices. Higher ferrous scrap and iron ore prices have forced mills to offer steel at high prices to maintain their margins. Demand in both domestic and global markets for finished steel has been recovering from the automotive and infrastructure sectors. 


In the Southeast Asian markets, Tokyo Steel sets a benchmark for other mills including, Posco, Hyundai, Baoshan, and Formosa. 


Ferrous scrap prices flat

Firm ferrous scrap prices have narrowed margins for many EAF-based mills in Japan. But an increase in steel consumption could support steelmakers. 

In September, Tokyo Steel raised its bids for ferrous scrap purchases twice. Effective Sept 15, bids were increased by JPY1,000/mt ($9/mt) for ferrous scrap delivered to Tahara works, and JPY500/mt delivered to Kyushu works. Purchase prices for #2 HMS was announced at JPY26,000/mt ($246/mt) delivered to Utsunomiya works, up by JPY2,500/mt from Aug 14. Since then, however, purchase prices for domestic scrap have remained flat. 




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