Japan¡¯s biggest steelmakers are raising prices of the metal used in everything from cars to skyscrapers and warning of more to come.
JFE Holdings Inc.¡¯s steel-making unit will raise prices by ?20,000 ($160) a ton across all products from April to compensate for surging coking coal and iron ore costs, according to a spokesman at the company. Additional hikes are likely this year as transport costs are also rising, he said. JFE estimates its average steel prices were ?115,000 a ton in the quarter through March.
Nippon Steel Corp., said it raised domestic prices of steel sheets ¡ª used in construction and electronics ¡ª by ?10,000 a ton for May-delivery spot contracts. Japan¡¯s biggest steelmaker, warned in a response to questions that more prices rises will be needed this year. Nippon has estimated its average steel prices at ?130,000 a ton in the March quarter.
The prices of the two main inputs for steel production ¡ª iron ore and coal ¡ª have risen as Russia¡¯s invasion of Ukraine exacerbated supply shortages. Australian coking coal has jumped 45% so far this year, while iron ore prices in Singapore are up around 27%. More than 40% of the steel from the two companies is destined for export with carmakers the biggest customers.
¡°It¡¯s hard to predict what demand for steel will look like in the future, but the supply-demand balance isn¡¯t bad globally for now,¡± said Takeshi Irisawa, an analyst at Tachibana Securities Co. in Tokyo. That makes it ¡°relatively easier for domestic steelmakers to pass on increased costs,¡± he said.
Takahiro Mori, Nippon Steel¡¯s executive vice president, said in February that there would be an increase in longer-term contracts with domestic manufacturers in the half year starting April.
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