Tokyo steel in Japan has announced a price cut for its steel product sales by JPY5,000-9,000/mt ($47-84/mt) for April 2020. Weakened finish steel demand both in the domestic and export markets on COVID-19 lockdown and rising concerns on the same globally, led to a sharp drop in the prices.
Prior to this, the company had kept steel prices unchanged for six successive months since October 2019.
Davis learned from company official that for April shipments, steel bars, including rebar, will fetch JPY53,000/mt ($498/mt), down JPY9,000/mt ($84/mt) and channels prices will be cut by JPY9,000/mt or 11.1pc.
New prices for H-shaped beams will be JPY76,000/mt ($714/mt) down JPY7,000/mt or 8.4pc from the prior set of prices and the prices for Hot-dip galvanized coils down JPY5,000/mt ($47/mt) or 5.5pc.
Japanese economy is on a downward swirl amid slowdown in service and travel industries. Tokyo Olympics construction activities mostly complemented, and the games scheduled in August have been postponed now. Though so far there is not significant drop in steel prices, if COVID-19 pandemic continues then few companies will adjust their plans of building commercial facilities and infra projects impacting steel demand.
Japanese currency Yen depreciated to 106.5 today against US Dollar after reaching 102 levels a week earlier. Steel inventories of finish flat remained high in Japan while a risk of cheaper imports from countries like China, South Korea and Taiwan into Japanese markets impacted the prices negatively.
Ferrous scrap prices
Since Feb 4, the steelmaker made eight price cuts in which prices for ferrous scrap purchase domestically dropped by JPY2,500-5,000/mt ($24-47/mt). With the latest price revision effective from 12 March, prices for #2 HMS del to Utsunomiya plant in the Kanto region are at JPY19,500/mt ($184/mt) dropping from JPY23,000/mt on Feb 4. Bids for #2 HMS del to Tahara, Okayama and Kyushu are at JPY20,500/mt, JPY19,000/mt and JPY18,000/mt dropping from JPY23,000/mt on Feb 4.
The spread between rebar shipments in April and #2 HMS delivered to its Utsuonmiya plant in the Kanto region effective today will be at JPY33,500/mt, down from JPY42,000/mt in the prior month.