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Nippon Steel, Japan's largest integrated steel producer, has decided to add Yen 10,000/tonne ($90/t) to prices of all types of carbon steel pipes including welded and seamless pipes for spot domestic sales from September production, a company official confirmed on July 6, citing rising input costs and supply tightness.
"We have been lifting the prices of most of our products, and the availability of some items is very tight," the official commented. "This needs to be reflected in our prices - for us to supply stably - and pipes are one of these products," she told Mysteel Global.
This will be the company's third increase for carbon pipes, the first being Yen 15,000/t from January sales and the second by 10% from May sales. Sources had estimated the second increase added around Yen 15,000/t to the price of common grade welded pipe but was much larger for seamless pipes. Bookings for Nippon Steel's pipe production for September are mostly placed in July, they said.
Nippon Steel does not disclose final prices of its steel products, but as of July 7, dealers were selling STK400 structural pipes (48.6×2.3mm) in Tokyo at around Yen 139,000-140,000/t, up Yen 6,000/t on month or Yen 20,000/t higher from the end of January, sources confirmed.
A Tokyo-based distributor had expected Nippon Steel to lever up prices again because prices of hot rolled coils - the feed materials for welded pipe - are now much higher. "The company had added a total Yen 45,000/t to its HRC prices from January, so the additional rise means the hike for pipes has become just as large," he explained.
He added that demand for carbon pipes has been firm from manufacturers and that inquiries from the construction sector are expected to start rising soon. "We will be able to select high-priced orders to fulfill, and market prices will continue rising," he predicted.
Nippon Steel does not reveal its production volume for welded pipes, but the company estimated its production of seamless pipes during April-September will reach 300,000 tonnes. The company's output of seamless pipe, a core product for the integrated mill, has been below 1 million tonnes since its April 2019-March 2020 business year.
"Our sales of OCTG have been stagnated because of the slowdown in oil-related new projects from the slide in crude oil prices," the official explained. "So most demand for seamless pipes for now is not for oil exploration but for other purposes such as automobile manufacturing," she added.
The latest data from the Japan Iron & Steel Federation showed that Japan produced 103,700 tonnes of seamless pipes in January-May, down 7.3% on year, while output of welded pipes at 1.56 million tonnes was up 2.4% on year.
Source: Steelmint
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