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The company said it would raise its list prices for most products by ¥2,000 ($20) per tonne for October contracts. But for H-beams, it said it would be seeking ¥1,000 ($10) on top of the list price.
Kiyoshi Imamura, Tokyo Steel’s marketing director, pointed out that the market is ready to accept price hikes as the supply-demand balance is becoming increasingly tight.
The company is being supported by continued strength in the construction sector, which is expected to enjoy something of a boom in the second half of the fiscal year that begins next month as a number of civil engineering and reconstruction projects get underway and housing starts continue to improve.
Tokyo Steel is also being aided by a sense that the regional steel market has bottomed out after moves by Chinese mills to raise their prices.
The company only left its prices for hot-dipped galvanized coil, rebar and square hollow sections unchanged.
After the adjustment, its list price for H-beam will move up to ¥76,000 ($766) per tonne; that for hot rolled coil to ¥64,000 ($645) per tonne; and that for plate, ¥71,000 ($716) per tonne.
Tokyo Steel's move has been mirrored by Yamato Steel, which is raising its H-beam prices by ¥3,000 ($30) per tonne next month and is additionally reducing its order intake by 20% to ensure that the hikes are carried through.
The need to raise prices is being made more necessary as a result of the sharp rebound in scrap prices since last month. Tokyo Steel has just raised delivery charges to its Utsunomiya plant by ¥1,000 ($10) per tonne to ¥36,000 ($363) per tonne, the highest level in over two years.
Tokyo Steel said it would raise its domestic prices for most products next month amid growing confidence in the country’s construction steel market.