Posted on 14 Jun 2010
Tokyo Steel Cuts Prices for First Time in Six Months
Tokyo Steel Manufacturing Co., Japan’s largest electric-furnace mill, cut prices by as much as 12 percent for July contracts, the first reduction in six months, as price competition with Asian mills intensified and costs fell.
H-beams, used in construction, were lowered by 8.9 percent, or 7,000 yen, to 72,000 yen ($784) a metric ton, the company said in a Tokyo briefing today. Hot coils were reduced by 9.7 percent to 65,000 yen a ton.
Slowing demand in China, the world’s largest steel consumer, prompted local mills to reduce prices, which has an impact on the global market, Tokyo Steel Managing Director Naoto Ohori said today. The cost of scrap metal Tokyo Steel uses at its Okayama plant has also declined about 23 percent from an 18- month high on March 30.
“The company needs to start afresh under such situations,” Ohori said.
Tokyo Steel shares rose 0.4 percent to 970 yen as of 1:04 p.m. on the Tokyo Stock Exchange.
Tokyo Steel cut the July contracts for all its steel products by between 7,000 yen a ton and 9,000 yen a ton. Plates were reduced by 9.2 percent to 69,000 yen a ton, while pickling coils were reduced by 12 percent to 68,000 yen, the company said.
Falling Prices
Benchmark steel prices in China have fallen 10 percent from an 18-month high on April 15, as the government imposed measures to curb speculation in the property market. Baoshan Iron & Steel Co., China’s biggest publicly traded steelmaker, cut prices for July delivery for the first time in eight months amid concerns credit curbs may trim demand from automakers and builders.
A weaker South Korean currency also led to increasing imports of Korean-made steel into Japan, raising competition, Ohori said. The won has slumped 7.6 percent this quarter against the dollar, the worst performing currency in Asia, according to data compiled by Bloomberg.
Tokyo Steel is cutting prices as rivals including Nippon Steel Corp. and JFE Holdings Inc. are looking to raise prices because of higher raw material costs for iron ore and coking coal. Nippon Steel and JFE make steel using blast furnaces.
