Tokyo Rebar Makers to Expand Production Cut in November

Japanese rebar makers around Tokyo would reduce the concrete reinforcing steel bar output by 30% in November from a year earlier compared with 20% cut in October. The makers’ order receipt decreases to 100,000 tonnes in September from 140,000 tonnes in August and more than 230,000 tonnes in July when general contractors virtually hold the new order. The makers are likely to expand the output reduction when the order receipt is expected to be low in October as September.

Rebar production of Godo Steel’s Funabashi plant and Tokyo Tekko’s plant in Tochigi Prefecture decreased by 20% in September from a year earlier. Mukoyama Steel Works and Sanko Seiko expect the production decrease by around 20% in October from a year earlier, which represents more than 10% down from the plan. Other makers appear to decrease the output by 30% from a year earlier in and after November compared with 20% cut in October.

Production of rebar could decrease more in January-March. They reduce the order backlog due to lower new order receipt while they hold 2.5-4 months of backlog now. One maker source said the makers may have to expand the output cut up to 50% in early 2009.