Reuters reported that Tokyo Steel Manufacturing Co would raise prices to offset higher costs of steel scrap, in its first across the board price hike since September 2009. The company also said that it would resume exports of hot coil and H beam steel for the first time since September 2008 to tap booming steel markets in China, other Asian countries and the Middle East.
Mr Naoto Ohori MD of Tokyo Steel said that "Price rises in overseas markets have been gaining momentum since the start of this year due to anticipation of higher iron ore and coking coal prices after April 2010. We are shifting to profitable exports as the domestic construction market remains in the doldrums."
Tokyo Steel said that it would raise domestic prices on all its products by JPY 3,000 per tonne in February. That would increase the price of its mainstay H beam steel by nearly 5% to JPY 66,000. The company also said it had struck export contracts on hot coils at USD 590 per tonne and H beams at USD 660.
Mr Ohori said that "Export prices of hot coils and H-beams are rising further. The overseas steel market is definitely on an upward trend."
But Japan's construction market remains in a slump as companies rein in spending on new plants, while consumers delay purchases of new houses due to an uncertain economic outlook. The new government has also frozen a large number of public works projects, adding to the slump.