Posted on 22 Dec 2022
Kyoei Steel, Japan's largest rebar producer, is rolling over its domestic prices of rebars for January sales, the company announced on Wednesday, after the Osaka-based mill had added Yen 5,000/tonne ($38/t) last month for current month sales, as Mysteel Global reported.
In a statement, Kyoei said that the price increase for December contracts "has completely penetrated the market" but warned that its costs are rising and that it is essential that these rises be passed on and to bring market prices into line.
"The rise in prices of alloys, electrodes, auxiliary materials and fuel will be unavoidable in the future," it noted. "In particular, electricity charges continue to increase due to energy price adjustments, and next year the increase will be even larger," it said.
Kyoei never reveals its exact list prices. But as of Wednesday morning, deals for SD295A 16-25mm rebars in Tokyo were being done at around Yen 118,000-121,000/t and in Osaka at Yen 99,000-100,000/t, according to market sources. Prices in Tokyo had not changed during the past month but those in Osaka were Yen 3,000/t lower.
That Kyoei would keep its prices unchanged is probably not surprising, given that its larger rival, Tokyo Steel Manufacturing, on Monday announced that it would be keeping prices of its entire product catalogue – including rebars – unchanged for January, as reported. Tokyo Steel's list price for its base size (13-25 mm) rebars remains at Yen 97,000/t.
Scrap prices are still the primary concern for the mini-mills. At a board of directors meeting at the National Association of Small Bar Manufacturers and Distributors last Thursday, Kyoei Steel chairman Hideichiro Takashima noted that ferrous scrap prices had soared in the first six months of this year, and the current market is on a downward trend compared with that period.
"However, the market price remains high because the demand structure has been changed due to global decarbonization. We also have to consider trends in manufacturing in emerging countries and major developed countries," industry media quoted him as saying. "In these situations, the market price will continue to stay high," Takashima warned, adding that steelmakers need to pay attention to rapid fluctuations in prices and ferrous scrap quality.
The board noted that regarding supply and demand for rebars this month, "the situation had been uncertain (in major rebar consuming regions across Japan) in the first half of December. Therefore, with regard to offers, purchasers stayed on the sidelines."
However, after the Kanto Tetsugen group's scrap export auction held on December 9 showed a large jump in scrap export prices, signs of a rebounding trend appeared in the ferrous scrap market, the Association executives noted, adding "we will closely watch purchasing offers for small bars."
The winning price for the H2 grade scrap the Tetsugen dealers were offering was Yen 47,710/tonne FAS, some Yen 3,000/t higher than traders were paying collectors at Tokyo Bay ports at the time, as Mysteel Global reported.
Source:Mysteel Global
