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

Japan’s Tokyo Steel has raised steel prices by JPY2,000/mt ($19/mt) for all steel products for October deliveries on Tuesday, Sep 15, in line with rising global steel 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. 


Ferrous scrap prices have followed the global trend and increased sharply. Meanwhile, domestic activity is still slow, however, finished steel inventory levels have decreased as mills cut production amid maintenance activities in August, this pushes prices up in Japan, said a source at Tokyo Steel.


The company has raised prices by 2.2-3.4pc after keeping them unchanged for two consecutive months in August and September.


Tokyo Steel revised prices of finished long steel bars, including rebars to JPY61,000/mt from JPY59,000/mt ex-works. While the prices for H-shaped beams were held unchanged at JPY81,000/mt ($768/mt) ex-works.


Finished flat steel prices for hot-rolled coils (HRC) rose by JPY2,000/mt to JPY67,000/mt in October from JPY65,000/mt in September. Demand for steel sheets used in the manufacturing industry remains high amid a robust recovery in economic activities.  


Tokyo Steel’s October prices  (JPY/mt)
ProductsOctSepChange MoM
H Beams91,00089,0002.25%
Striped H steel93,00091,0002.20%
I shaped steel90,00088,0002.27%
Channel steel79,00077,0002.60%
D bar61,00059,0003.39%


In the Southeast Asian markets, Tokyo Steel’s prices are followed as a benchmark by other competitors including Posco, Hyundai, Baoshan and Formosa. 


Raw material prices bullish

The spot price for benchmark Fe 62pc content Iron ore was up 1.40pc to $130.17/mt cfr Qingdao on Sep 14. Market participants expect mills to replenish their inventory before the Chinese golden week holiday in October, which has led to active trading at ports and a rise in prices.


Higher ferrous scrap prices 

In Japan’s domestic market, ferrous scrap prices rose by JPY2,500-3,000/mt since mid-August and have maintained the uptrend in September. Tokyo Steel hiked scrap purchase price for five successive times since Aug 8. High ferrous scrap prices narrowed margins for many EAF-based mills in Japan, while the increase in steel consumption provided some support to steelmakers. 


In September, Tokyo Steel has hiked ferrous scrap purchases twice. Effective Sep 15, bids increased by JPY1,000/mt ($9/mt) for ferrous scrap delivered to the Tahara works and JPY500/mt delivered Kyushu works. Purchase prices for #2 HMS is at JPY26,000/mt ($246/mt) delivered Utsunomiya works, up by JPY2,500/mt from Aug 14. 



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