Japan Rebar Market Price Hits Bottom

Japanese market price of reinforcing steel bar seems to hit bottom this week. The market price is 51,000 yen per tonne around Tokyo and 53,000 yen per tonne around Osaka at the direct shipment from the makers to the users. Several rebar makers announced the price hike effective for January contracts because ferrous scrap price has risen since the beginning of this year. Rebar market price is expected to rebound after 5 months.

Thin rebar makers started the price hike announcement around Tokyo. Chiyoda Kotesu Kogyo is offering the hike by 3,000 yen per tonne effective for January contracts. Other makers, Win First, Kanto Steel and Johnan Seikojo, also announced the hike effective for January orders to reflect high material costs. Many makers are posting losses. Base-size rebar makers are also expected to raise the selling price.

The demand seems to bottom out around Tokyo. Rebar makers’ order receipts is estimated to exceed 200,000 tonnes in January, increasing from 127,000 tonnes in December 2009. This volume increase may involve speculative demand before the price hike. Rebar dealers’ reselling price stays flat at 56,000 yen per tonne. A dealer source said the price hike is still difficult because the actual demand maintains low.

Rebar market price also seems to hit the bottom around Osaka. New contract price currently exceed 50,000 yen per tonne at least. However, dealers cannot raise the reselling price yet despite of their announcement of price hike. The demand is slightly increasing from civil engineering while keeps low from other applications. Dealers’ reselling price stays flat at 60,000 yen around Osaka.

Rebar makers in every region would launch out the price hike. Ferrous scrap export price is recently 30,000 yen per tonne. A major rebar maker source said the makers should sell rebar at 70,000 yen per tonne if ferrous scrap price is above 30,000 yen.