Imported Steel Wire Rod to Cap Japanese Wire Product Market Price

Japanese steel dealers are cautiously watching how much the carbon steel wire rod price surges at overseas markets. Tokyo headed dealer said the contract price of Chinese carbon steel wire rod is currently around FOB US$ 600 per tonne, higher by US$ 80 than February contracts. Japanese dealers expect the offshore market price would approach US$ 650 excluding the upsurge of raw materials. Japanese wire rod makers are likely to raise their selling price in April. Meanwhile, cheaper imports will arrive at Japan in April. Japanese dealers are concerned domestic market price of wire products couldn’t rise if the price gap widens between the domestic wire rod and imported wire rod.

Japanese carbon steel wire rod import increased by 15.3% to 196,000 tonnes in 2009 from 2008 while the domestic shipment dropped by 36.1% to 981,000 tonnes, according to Japan Wire Products Association. The domestic shipment was 91,000 tonnes in January 2010, about 60-70% level compared with the average in April-September 2008.

The shipment volume of carbon steel wire rod and wire products is forecasted to recover 70% level in or after July-September. The demand maintains stagnant from civil engineering even in the demand season of January-March despite of several large construction projects around Tokyo to consume steel wire products.

The demand yearly weakens in April-June. A dealer source said the price hike may be easier in the demand season of autumn. Domestic market price of steel wire products might not increase widely from the current bottom level, capped by imported wire rod of cheaper price.