A difficult year just keeps getting tougher for Japan’s steelmakers, raising the possibility that the world’s second-biggest producer could join the ranks of nations that have raised trade barriers to cheaper imports.

Forced to contend with an unprecedented glut of metal on export markets, and a yen that is doing them no favors, the nation’s top mills swung to losses in the first quarter that ended June, warning that conditions could deteriorate. Forward three months, and the firms are dealing with new risks around the surging cost of a key raw material and a jump in steel imports.

Nippon Steel & Sumitomo Metal Corp., the world’s biggest mill by market value, and JFE Holdings Inc. have both warned that raising prices is essential to absorb the extra cost from a likely doubling in the price of coking coal.

At the same time, an abundance of steel and a strong yen are starting to suck in the additional imports that might make their customers from automakers to shipbuilders think twice about agreeing to the increases.

At a briefing in Tokyo last week, Yasumitsu Saeki, executive vice president of Nippon Steel, warned of possible trade action against Asian rivals, after Japan’s Iron and Steel Federation reported that imports climbed 27 percent to 496,000 metric tons in August from a month earlier. Saeki also said customers face “considerable” price increases to compensate for the sky-high cost of coking coal.

“Import prices are at significantly low levels,” said Saeki. “We’ll have to consider how to respond if dumping conditions are met under the rules of the World Trade Organization.” He said imports are rising from China, South Korea and Taiwan, and noted that the pace of domestic demand growth has fallen behind expectations.

Japan has never adopted protectionist measures on steel imports, but if it did it would be one of many barriers raised from India to the U.S. against a flood of cheap metal from China. The world’s top producer is churning out near record amounts and exporting its surplus as growth slows — and in the process, hoovering up the supply of coking coal, which saw spot prices climb to a record $213.4 a ton at the end of last month.

Steel imports are still just a fraction of output. Japan is expected to churn out 26.6 million tons in this quarter, according to the trade ministry. As such, Nippon Steel may only be firing a warning shot with its comments, according to Kazuhiro Harada, analyst at SMBC Nikko Securities Co.

“Imports have increased but haven’t reached levels at which steelmakers feel it’s a crisis,” Harada said. “Still, as protectionism has been on the rise across the world, there’s a stronger view in Japan than in the past on the need to build walls to a certain extent.”

Satoshi Suenaga, deputy director of the metal industries division at Japan’s trade ministry, said by phone that his unit “will offer support if steelmakers apply for an anti-dumping investigation.”

Nippon Steel’s shares have dropped 12 percent this year, while JFE Holdings has lost 20 percent. Over the same period, the dollar has weakened against the yen by 14 percent.

The companies are negotiating their quarterly contracts for coking coal with suppliers, which may be settled at $180 a ton, up from $92.50 a ton for the current three months, according to a survey of traders compiled by Macquarie Group Ltd. last month.

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