Tokyo Steel hikes prices to offset materials costs

TOKYO (Reuters) - Tokyo Steel Manufacturing Co <5423.T>, Japan's biggest maker of construction steel, said it would raise prices to offset higher costs of steel scrap, in its first across-the-board price hike since September.

The company also said it would resume exports of hot coil and H-beam steel for the first time since September 2008 to tap booming steel markets in China, other Asian countries and the Middle East.

"Price rises in overseas markets have been gaining momentum since the start of this year due to anticipation of higher iron ore and coking coal prices after April," Naoto Ohori, managing director of Tokyo Steel, told a news conference.

"We are shifting to profitable exports as the domestic construction market remains in the doldrums."

Tokyo Steel said it would raise domestic prices on all its products by 3,000 yen ($33) per metric tone in February. That would increase the price of its mainstay H-beam steel by nearly 5 percent to 66,000 yen.

The company also said it had struck export contracts on hot coils at $590 per metric tone and H-beams at $660.

"Export prices of hot coils and H-beams are rising further. The (overseas) steel market is definitely on an upward trend," Ohori said.

But Japan's construction market remains in a slump as companies rein in spending on new plants, while consumers delay purchases of new houses due to an uncertain economic outlook.

The new government has also frozen a large number of public works projects, adding to the slump.

Tokyo Steel is now operating at 50 percent of its capacity.

(Reporting by Yuko Inoue; Editing by Chris Gallagher)