Tokyo Steel Blames Yen Gains for First Price Cut Since Octoberby
Tokyo Steel Manufacturing Co. Ltd. cuts its monthly prices for the first time since October due to a weak steel market and gains in the yen. Its shares fell as much as 7.1 percent.
Japan’s biggest steel producer from scrap metal lopped off 3,000 yen from its March prices for H-beam and hot-rolled coil contracts to 67,000 yen a metric ton and 50,000 yen a ton, respectively. Its shares slumped to as low as 699 yen, and traded 4.3 percent lower at 720 yen as of 11:15 a.m. in Tokyo.
Managing Director Kiyoshi Imamura told a briefing in Tokyo that the company doesn’t expect further price declines. It “adjusted its prices to reflect market conditions,” while “the yen’s recent gains also triggered cuts,” he said.
Tokyo Steel bucked the trend set by other Japanese steel producers last month, reporting that profit rose in the nine months to December and raising its full-year forecast by almost half. The three largest mills in the world’s second-biggest producer all cut their forecasts due to plunging overseas demand, exacerbated by record shipments from China.
The yen has posted big gains in February, making imports cheaper and exports more expensive.
“We are concerned that cheaper imports will come to Japan due to the yen’s gain,” said Imamura. “Overseas mills are trying to raise dollar-based prices. The problem is the stronger yen is offsetting overseas price increases,” and pressuring the domestic market, he said.