Tokyo Steel has raised its selling prices across the board for the first time in seven months on the back of rising costs and a recovery in demand.

Japan's largest electric arc furnace operator is increasing its October prices by 3-7%, including a ¥3,000 ($39) hike for hot rolled coil to ¥68,000 per tonne and a ¥5,000 rise for H-beam to ¥79,000 per tonne.

The company has also raised its spot H-beam prices to ¥81,000 from ¥77,000 per tonne last week and its spot rebar prices to ¥63,000 from ¥61,000 per tonne.

Several other mini-mills, including Osaka Steel, Yamato Steel and Kyoei Steel, also plan to sharply increase their prices next month.

Demand for civil construction projects in Tokyo and elsewhere, as well as a fully-fledged recovery in the automotive sector, have brightened the market, Tokyo Steel said.

Domestic prices were being supported by signs of a bottoming in regional prices and moves by exporters to increase their prices, it added.

Also, the company desperately needs to offset a rapid rise in its scrap costs.

It has been forced to pay 7% more for scrap in the past couple of weeks alone, with few signs that charges will fall any time soon.

However, the housing market was staying very weak and demand for reconstruction in areas hit by the March 11 earthquake is not expected to emerge until well into next year, a company official said.

"There is still a huge amount of rubble that needs to be cleared away. Once that is done, the immediate priority will be on infrastructure projects. Only after that will work start on actual building construction," he said.