Tokyo Steel Manufacturing Co., Ltd. said on Nov.21st, 2016 it would raise the prices of all of its products by 5,000 yen ($45.12) per tonne for December delivery, reflecting a rally in raw material prices and higher product prices abroad.

Tokyo Steel's pricing strategy is closely watched by Asian rivals such as South Korea's Posco and Hyundai Steel Co and China's Baoshan Iron & Steel Co (Baosteel) that export to Japan.

The flat increase means product prices for Japan's top electric-arc furnace steelmaker will rise by about 7 to 11 percent in December depending on the product, Tokyo Steel's managing director, Kiyoshi Imamura, told reporters. The increase comes amid rising prices for scrap metal and a series of price hikes by global steel mills to pass on surging coking coal prices, he said.

Tokyo Steel left its prices unchanged in November but cut October delivery prices by up to 13 percent.

"Global steel market has entered in a clear bullish trend as steelmakers worldwide have been boosting product prices in the face of surging coking coal prices," Imamura said.

Recycled scrap metal, a main feed material for electric-arc furnaces, has soared by 5,000 to 7,000 yen a tonne since hitting a bottom in August, tracking a rally in coking coal, a key steelmaking material for blast furnaces, he said.

Coking coal has more than tripled this year as China, the world's biggest coking coal producer, has cut supply to curb overcapacity and pollution.

Based on the flat increase, prices for the Tokyo Steel's main product, H-shaped beams, which are used in construction, will climb by 8 percent to 70,000 yen per tonne. Steel bars, including rebar, will rise by 11 percent to 52,000 yen. The company produces 15 different steel products.

This is its first across-the-board price hike since May.

"If the bullish trend in steel market continued, we may raise product prices again for January delivery," Imamura said.

However, his market outlook was cautious, adding the recent rally has been driven by higher raw material costs instead of stronger demand growth and tighter supply.

"We are not so confident that the steel market's rally will continue as the fundamental problem of oversupply due to China's massive output has not been changed," he said. ($1 = 110.8200 yen) (Reporting by Yuka Obayashi; Editing by Biju Dwarakanath and Christian Schmollinger)

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