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Tokyo Steel Reports Y5,000 June Markdown For All Steel Products
Japan's largest electric steelmaker Tokyo Steel Mfg Co announced May 16 that the company has decided to reduce the list prices of the whole steel products by a uniform Y5,000/ton in its June supply contracts of domestic sales, with a May 18 deadline for order intakes, which indicates a price reduction across the board for the first time in seven months since November last year.

The decision is described as mainly intended to stem increased inflows of foreign steel products into Japan in relation to the East Japan earthquake and tsunami disaster.

As a result, the new list prices of main products in base sizes are Y67,000/ton FOT (free on truck) for HR coils; Y85,000/ton FOT for hot-dip galvanized coils; Y71,000/ton FOT for checkered plates; Y74,000/ton FOT for heavy plates; Y76,000/ton FOT for H-beams; Y73,000/ton FOT for channels; Y85,000/ton FOT for U-piles; and Y59,000/ton CIF for deformed bars.

Naoto Ohori, Tokyo Steel's managing director and general manager of marketing, made his comments May 16 to the following effect.

<>With ferrous scrap prices on the downside, too, Tokyo Steel has opted to start afresh with a uniform price reduction of Y5,000/ton for all the steel products, a markdown that is commensurate with the actual market conditions.

<>There are enhanced signs of stagnancy in steel market conditions at home as demand for steel products is further slackening and the restoration of production activities is lagging after the East Japan quake and tsunami disaster. Besides, more items increased markedly in quantity in Japan's various steel imports in March as compared with what turned out a month ago. As a result, Tokyo Steel sees a heightened need to fight steel imports in relation to the East Japan catastrophe.

<>Steel prices are trending downward overseas as well, mainly in remote countries, amid continued high prices of raw materials. Accordingly, Tokyo Steel is contemplating watching trends of international market prices henceforth.

<>Tokyo Steel estimates its finished steel production at a total of around 220,000 tons for May. The total would break out as 120,000 tons of HR coils, 70,000 tons of H-beams, and 30,000 tons of heavy plates.

<>The company enjoys improved arrivals of local ferrous scrap at its works after the company has reduced its purchase prices of material. But the current prices of local ferrous scrap are still relatively high as compared with international prices, given an appreciating yen against the US dollar. Meanwhile, the company is scheduled to take delivery of import ferrous scrap next week at its flagship Okayama works. In this connection, the company believes that there are no strong factors so far in the ferrous scrap market.
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