Rebar Price Drops by 5,000 yen/t in Tokyo

Concrete reinforcing steel bar market price decreased by 5,000 yen to around 100,000 yen per tonne around Tokyo late last week. The price dropped by total 10,000 yen last week. The price is expected to decrease to less than 100,000 yen sooner or later when some transactions are already around 95,000 yen. The buyers of general contractors seek lower price aggressively to meet plunged ferrous scrap price level. The rebar price should decrease more and the makers are apparently forced to reduce the price to less than 100,000 yen.

Rebar makers around Tokyo reduced the selling price only by 15,000 yen per tonne while scrap price decreased by more than 60,000 yen from the peak. The makers get wide margin now but they reject to reduce the selling price as much as scrap price down when they anticipate the undervalued scrap price could rebound widely.

The market players expect the rebar price should decrease more when the makers’ scrap purchase price decreased to around 10,000 yen per tonne. General contractors try to secure rebar as much as only immediate usage and wait the major price decrease. Some general contractors bid less than 90,000 yen to pressure on the suppliers.

Rebar makers’ order receipt decreased to less than 200,000 tonnes per month since August. The order receipt increased slightly in October but the level was still low level.

The distributors are clearing rebar sales commitment at 115,000 yen per tonne, which the dealers secured from makers before, and now sell rebar with around 100,000 yen of cost price after makers’ price cut. However, the dealers are squeezed by lower selling price while they are facing very slow demand along with credit uncertainty when the investors postpone or cancel condominium building plans. The dealers are compromising the price for large lot orders from financial healthy buyers, which reduces the price gradually.