Japan Wire Rod Demand Hits Bottom in 1H of F2009

Japanese carbon steel wire rod demand is expected to decrease by 30% in the last half of fiscal 2009 from the first half of fiscal 2008. Japanese wire rod makers judged the demand hit bottom in the first half of fiscal 2009. However, the makers apprehend Chinese wire rod makes an impact to domestic market price. Wire rod market price is expected to take a time to hit bottom in China after China National Day. Because Chinese wire rod is delivered for 2 weeks to Japan from China, the import price of Chinese wire rod doesn’t rise until the turn of the year.

Wire rod demand isn’t expected to largely increase in the last half of fiscal 2009, while to increase from the first half of fiscal 2009 when the demand decreased by 40-50% from the first half of fiscal 2008. The amount of the shipping for wire rod is likely to increase in the last half of fiscal 2009 from the first half of fiscal 2009 despite of weak demand for building material and civil engineering. The amount of the shipping for wire rod for cold hammering is increasing thanks to the recovery of the demand for automobile.

Imported wire rod is expected to decrease when South Korean wire rod is increasing for tire code. On the other hand, Chinese wire rod price is forecasted to continue to drop, and decreased to the first half of 50,000 yen per tonne for October-December. Imported products price such as welded wire mesh seems to drop.

Japanese processing makers and dealers recognized the market price hit bottom and expect to raise the market price.