Nippon Steel, a leading H-beam producer in Japan, has decided to keep its H-beam domestic spot sales prices unchanged for September, so as to give the market one more month to fully digest its price hike for July sales, though it will lift the prices in the coming months to reflect higher input costs, the company announced September 14.
In general, the H-beam demand is expected to recover further from the slump in the past few months because of the virus outbreak, but "it will not be back to the same level as last year, but our production costs have been rising further, and we hope our customers understand our challenging situation," a company official explained.
Together with its headquarters, Nippon Steel Structural Shapes Corporation, based in Wakayama in western Japan, will also keep its H-beam prices for unchanged for September, he added.
Nippon Steel does not disclose its actual H-beam lit prices, but as of September 15, the SS400 grade 200x100mm H-beams are being transacted at around Yen 74,000-75,000/t in the spot market of Tokyo, unchanged on month, according to market sources.
For July sales, Nippon Steel raised the H-beam prices for the first time in 19 months by Yen 5,000/tonne ($47/t), and rolled over the prices for August sales, as reported.
Despite better demand, Nippon Steel has no intention to increase its H-beam output, as the comparatively supply tightness will lend support to the prices in the long run, the company official reasoned.
"H-beam stocks at distributors havethinned, and hopefully the market situation will maintain until our next month price adjustment," he said.
By the end of August, H-beam stocks at Nippon Steel's Tokiwakai group comprising about 90 distributors across Japan totalled 162,100 tonnes, down 0.5% on month, but "this is the lowest level in a decade, and producers are limiting their supply for spot sales," a distributor in Tokyo explained.
"At the same time, we have been very cautious in procuring more H-beams from producers too, as we are still uncertain about the market prospect," he added.
Tokyo Steel Manufacturing, also a H-beam producer, for example, announced on September 15 to keep its H-beam prices unchanged for October sales, according to the company.
In July, Japan produced 291,900 tonnes of H-beams, up 0.8% on year and 0.9% higher on month, as reported, Nippon Steel and Tokyo Steel usually contribute to about 30% of the total output respectively, Mysteel Global notes.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.