Japan Major Steels could Cut Wire Rod Export by US$150/t

Japanese integrated steel makers are in negotiation of wire rod export price with transplants of Japanese automobile industry for July-September. The price level could decrease around US$ 150 per tonne from April-June as the makers reduced the annual contract price by 15,000 yen for parts materials of Toyota Motor to reflect lower raw materials cost.

The export price kept increasing from April-June 2008 to October-December 2008 as surging all steel products. The price kept high level in January-March and April-June 2009 except for some products including high carbon wire rod for building under very slow demand for automobile.

The export volume could increase in July-September from the bottom despite of the potential price cut. Japanese integrated steel makers see the demand for wire rod for tire code hit bottom in January-March due to firm Chinese automobile demand. The demand is also hitting bottom for parts plants of Japanese makers in Southeast Asia in April-June. The demand is expected to increase when the buyers increase the order to Japanese steels when the buyers reduced the inventory.

However, the demand is uncertain in USA when the user industry is middle of inventory adjustment and bankruptcy of Chrysler and General Motors could impact on the industry.

Tokyo Rope MFG. operates at full capacity for the tire code plant in Jiangsu, China to meet strong demand from local users. Kobe Steel’s welding company also expects firm Chinese demand while the company concerns US welding materials demand for automobile.