Rebar Output Increases in Tokyo

Concrete reinforcing steel bar output increased to 360,000 tonnes around Tokyo in October, which was 7% higher than September and 6% higher than a year earlier. With firm demand, the output was highest level as boom in bubble economy. With the plenty of order backlog for local makers, the output is expected to be around 1 million tonnes in October-December after the output increased by 10% to 960,000 tonnes in July-September. However, some interests warn the potential oversupply. The makers should be cautious just to meet the actual demand to avoid imbalance market. Local rebar shipment was 340,000 tonnes in October, which was 5.5% higher than September and 9.5% higher than a year earlier. They shipped 6,000 tonnes for export. The shipment is to meet the demand level. The local rebar inventory increased by 11.8% to 173,000 tonnes at the end of October. Some market interests wary about the oversupply toward the demand slow season in January-March. A source in electric furnace steel maker said the oversupply could result in lower selling price though the supply is expected to be tight when Godo Steel plans renewal work of rolling mill at Funabashi plant with around 45,000 tonnes of monthly output capacity in early 2007. The market price is around 60,000 yen per tonne for base size with 19 millimeters diameter. The market increased by 1,000 yen in October after the makers increased the selling price by 2,000 yen in the month. However, the users of general contractors increase the resistance to the higher price and the price has no power to increase more. The makers should produce as much as the demand though they increase the output both for base size and smaller sized products.