Japanese steelmakers raise prices

Japan's biggest steel producers are raising prices for the metal used in everything from cars to skyscrapers and are warning there's more to come.

According to a company spokesman, the steel division of JFE Holdings Inc. will raise prices for all products by 20,000 yen ($160) per tonne from April to offset higher prices for coking coal and iron ore. Additional increases are possible this year, he said, as transport costs also rise. JFE estimates that average steel prices from the quarter to March were 115,000 yen per ton.

Nippon Steel Corp. said it had raised domestic prices for steel sheet used in construction and electronics by 10,000 yen per ton for spot contracts for delivery in May. Japan's largest steel producer warned in response to questions that further price increases would be needed this year. Nippon estimated average steel prices at 130,000 yen per ton in the March quarter.

Prices for the two main raw materials for steel production - iron ore and coal - have risen as Russia's invasion of Ukraine exacerbated supply shortages. Australian coking coal prices have jumped 45% this year, while iron ore prices in Singapore are up about 27%. More than 40% of the steel of these two companies is destined for export, and automakers are the largest buyers.

“It is difficult to predict what steel demand will look like in the future, but at the moment the balance of supply and demand globally is not bad,” said Takeshi Irisawa, an analyst at Tachibana Securities Co. in Tokyo. According to him, this "relatively makes it easier for domestic steelmakers to reallocate increased costs."

Takahiro Mori, executive vice president of Nippon Steel, said in February that the number of long-term contracts with domestic manufacturers will increase starting in April.

Source: The Japan Times