Bloomberg reported that Tokyo Steel Manufacturing Co may reduce prices for the first time in six months, undercutting larger mills such as Nippon Steel Corporation and JFE Holdings Inc.
Mr Naoto Ohori MD of Tokyo Steel said that the steelmaker may cut prices by between JPY 3,000 and JPY 5,000 a tonne for July contracts because of lower scrap costs.
The cost of the junked cars and old ships that Tokyo Steel uses at its Okayama plant to make steel dropped about 13% from an 18 month high on March 30th 2010. The price of iron ore, the main raw material for Nippon Steel and JFE, may jump 30% to 50% next quarter, prompting Japan''s two largest makers to push for higher steel prices.
Mr Ohori said that "Unless we see sudden gains in the global market prices and scrap prices it''s more likely our steel prices will go down."
Tokyo Steel Manufacturing increased prices four times this year before holding them steady in June at JPY 79,000 a tonne for construction beam steel and JPY 72,000 a tonne for hot coil. The company will announce July prices later this month.