Nippon Steel Corporation — one of Japan’s leading suppliers of steel plate to shipyards — has raised its prices by ¥10,000 ($90) per tonne from this month.
The increase in retail and construction sales brings the cumulative steel plate price increases in Japan since September last year to ¥60,000 per tonne. Other steel mills are expected to follow.
The price hike reflects an increase in price of iron ore and coking coal.
The move will likely impact on the negotiation of bulk purchase contracts with shipyards. At its latest earnings report in August Nippon Steel said it wanted to enter into "tenacious negotiations with customers to realise fair and appropriate long-term contract steel prices".
Japanese shipyards source their steel mainly from local suppliers. But similar price rises have been seen at steel mills in China and South Korea that have impacted local shipbuilders.
Broker Clarksons says that a 13% increase in its newbuilding prices index this year, across all sectors, is mainly due to "extremely strong steel prices".
The increases mean that Japanese shipyards may struggle to make money on orders won over the past two years.
Orders pick up
Japanese yards have seen orders pick up this year. According to the Japan Ship Exporters Association its member companies won orders for 199 ship amounting to 10m gt to the end of July, representing a 295% increase on the same period last year.
Some shipyards have shown particularly strong performances.
Nihon Shipyard, a joint venture shipbuilding company established by Imabari Shipbuilding and Japan Marine United, said it has won orders for 110 ships in the first eight months of this year.
