Osaka’s Rebar Makers to Lift Selling Price to Cover Higher Cost

Concrete reinforcing steel bar makers around Osaka try to increase the selling price by rejecting low priced order while they are forced to compromise the price under slow demand. The price action depends on the makers while they try to improve the price level to cover higher cost for raw material. A maker source said current price level is critical level for the profitability and 60,000 yen per tonne level is needed immediately under the current cost situation.

Local rebar demand keeps slow for months. The makers order receipt is very low when the buyers of general contractors hold the order. The market price is 50,000-53,000 yen per tonne at direct shipment transaction from makers to users while some transaction is as low as less than 50,000 yen.

Ferrous scrap price started to increase since late October. The steel makers purchase price is 28,500-30,000 yen per tonne, which is 1,000-1,500 yen higher than recent bottom. Many industry interests expect the price will increase more.

Local makers’ margin between the rebar selling price and scrap purchase cost is less than 20,000 yen per tonne, under which all makers cannot make money. The makers try to improve the profitability by increasing the price level especially for low priced transactions.

A maker source said the selling price improvement is urgent even under very slow demand and without such price improvement rebar makers cannot keep the operation. The source said the maker decided to reject low priced order from trading companies.