Japan's biggest steelmakers are raising prices for the metal used in everything from cars to skyscrapers, and are warning that more is to come.
JFE Holdings Inc.'s steelmaking unit is increasing prices for all products by 20,000 yen ($160) per ton from April to compensate for rising costs for coking coal and iron ore, according to a spokesperson for the company. He said additional hikes are likely this year as transportation costs are also rising. JFE estimates that average steel prices were 115,000 per ton in the quarter to March.
Nippon Steel Corp. said it has increased its domestic prices of steel sheets used in construction and electronics by 10,000 yen per tonne for May delivery spot contracts. Japan's largest steelmaker warned in response to questions that further price hikes would be needed this year. Nippon estimated average steel prices for the March quarter at 130,000 yen per ton.
Prices of iron ore and coal, the two main inputs for steelmaking, rose as the Russian invasion of Ukraine exacerbated supply shortages. Australian coking coal has risen by 45% so far this year, while iron ore prices in Singapore have increased by around 27%. More than 40% of the steel from the two companies is for export, the automakers' biggest customers.
Tachibana Securities Co. in Tokyo. "It is difficult to predict what the steel demand will look like in the future, but the supply-demand balance is not bad globally at the moment," said analyst Takeshi Irisawa. "This makes it relatively easy for domestic steelmakers to transfer the increased costs."
Nippon Steel's vice president, Takahiro Mori, said in February that there will be an increase in longer-term contracts with domestic producers in the six-month period starting in April.