Rebar Price Declines by 2,000 Y/T in Tokyo

Concrete reinforcing steel bar market price decreased by 2,000 yen to 60,000-61,000 yen per tonne for base size around Tokyo in the week, which is 50,000 yen lower than the peak in September 2008 and marked the lowest level since January 2007. The rebar price is likely to decline more while the price of H-beam and other construction steels is declining. The rebar market price could decline to less than 60,000 yen when the dealers and makers are forced to cut the price with pressure by the buyers.

The makers’ rebar order receipt around Tokyo seemed to increase to 200,000 tonnes in April. However, the order receipt apparently decreased to 160,000 tonnes in May and the order in June would stay as May level. The buyers reduce an order volume due to the unforeseeable demand trends.

The customers expected the price stability and increased the order volume while the buyers minimized the order before. However, the buyers again expect lower price after Tokyo Steel Manufacturing announced 3,000 yen per tonne of price cut for July shipment. Tokyo Steel mainly supplies rebar to customers in western Japan but the price around Tokyo is also impacted by the reduction and the procurement by buyers becomes lower.

Rebar makers around Tokyo try to keep the current rebar price when they have already reduced the price near the breakeven point and ferrous scrap price is increasing. However, the makers are likely to reduce the price more under the very slow demand.