Nippon Steel, one of the leading companies in the steel industry, has taken bold measures to counter rising raw material costs and protect its profit margins. The company recently announced an increase in the base price of hot rolled coil (HRC) for January 2024 deliveries.
The move comes as Nippon Steel plans to suspend production in February 2024 and carry out necessary overhauls on some production lines. The production suspension is expected to affect capacity by around 160,000 tons and lead to restrictions in the allocation of export quotas.
Nippon Steel's strategic decision to suspend production is aimed at creating a supply-demand imbalance that will push prices higher. This increase in prices will help offset the pressure on margins from rising raw material costs. Other major players in the industry, such as Baosteel and Formosa Ha Tinh Steel, have also raised HRC prices to justify the move.
This development comes amid positive trends in Japan's steel exports. The country's steel export volume reached 2.6 million tons in October this year, witnessing an impressive annual growth rate of 8.7%. In particular, there was significant growth in export volumes to both the European Union and ASEAN markets.
By making these unique market moves, Nippon Steel aims to maintain its competitive edge and financial stability in an evolving steel industry environment.
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