South Korean and Chinese Rebar Prices Continue Lowering

Rebar market price continues to drop in South Korea and China. In South Korea, rebar makers’ inventories are widely increasing in response to low sales of condominium buildings. In China, rebar demand is impacted by the government’s tight estate policy. In addition, yen exchange rate is steeply rising at present. Japanese rebar makers are concerned on weak export price to Asia.

In South Korea, rebar makers’ sales price is around 750,000 won per tonne (approximately 54,000 yen) and the market price is 760,000 won (55,000 yen). Hyundai Steel set the selling price unchanged at 801,000 won (57,600 yen) for July but the firm’s policy couldn’t support the market price. The importers’ reselling price of Chinese rebar is around 700,000 won.

South Korean construction market is in stagnancy. Condominium sales are especially slow. Inventory held by 7 major rebar makers is said to have approached 500,000 tonnes though the moderate level is said at 200,000 tonnes. Domestic rebar demand was 9.2-9.3 million tonnes in 2009 and was expected to increase to 9.6-9.7 million tonnes in 2010. However, in fact, the 7 makers’ sales decreased by 7.7% to 3.2 million tonnes for January-May from the same period of 2009.

Chinese rebar market price is currently around 3,700 yuan per tonne (approximately 45,000-50,000 yen) in Shanghai. The market price has lowered since 4,200-4,300 yuan in April. Some of local dealers are even offering 40,000-45,000 yen. Inventory adjustment is still required at both makers and dealers.

Japanese rebar export price is presently around FOB 48,000 yen per tonne to South Korea. South Korean importers are requiring price cut to 46,000-47,000 yen. Japanese rebar makers are cautious to conclude new export contracts when ferrous scrap price shows a rebound sign.