Wire Rod Makers Offer Hike under Severe Demand Condition

Godo Steel and Nakayama Steel Works, Japanese largest suppliers of carbon steel wire rod, started to offer price hike by more than 5,000 yen per tonne though the firms have already enforced price hike 3 times within this year. Such frequent hike for carbon steel wire rod is unusual in recent years. The makers perceive wire rod price is relatively low compared with other carbon steel products despite of large cost expansion for ferrous scrap.Godo Steel announced at the end of September the firm raises the selling price of carbon steel wire rod, bar-in-coil and deformed bar-in-coil by 5,000 yen per tonne. Nakayama Steel Works announced in October the firm raises the selling price of carbon steel wire rod and deformed wire rod by 7-8% or more than 5,000 yen per tonne effective for November shipment.However, wire rod demand maintains stagnant and the market prices of wire rod processing products are not increasing as much as wire rod price despite of strong selling stances of wire rod makers.Market demand for wire rod processing products, such as nails, wires and processed steel wires, maintains seriously low when public investment has been reduced mainly for civil engineering. Recent revision of Japanese building standard law also impacts the demand which delayed orders and construction start of new buildings.Makers and dealers of wire rod processing products cannot pass material cost up on their selling prices enough under such a market condition. Price gap would widen more between wire rod and processed products if Godo Steel and Nakayama Steel Works achieved the latest hike.