H-Beam and Rebar Market Price Drops around Tokyo

Major steel products for building material dropped in this week around Tokyo, which decreased to 65,000 yen per tonne by 3,000 yen for reinforcing steel bar and to 78000 yen by 2000 yen for H-beam. The demand keeps low in April. The market price is expected to continue gradual decline until Golden Week holidays in May.

Rebar award volume by makers increased to 160,000 tonnes by about 30% in February from January around Tokyo, which increased to 180,000 tonnes by 12% in March while keeps low level since August 2008 when the award volume was below 200,000 tonnes. The demand isn’t expected to recover when building plans is cancelled or put off in April.

Each general contractor is continuing to separately give out an order, and waiting market price decrease. Some general contractors are giving out an order of rebar at about 150 tonnes to large dealer against 1,000 or 2,000 tonnes of total order. A large dealer source said rebar market price is expected to hit the bottom at around 60,000 yen per tonne.

Ferrous scrap purchase price by rebar makers is strong, but the price is less than 20,000 yen per tonne. Lower ferrous scrap price is holding down rebar market price.

Users are waiting decline in H-beam price when coal purchase price by integrated steel makers largely decreased in fiscal 2009 shipping and other raw material price is expected to drop. An integrated steel maker source said makers have raw material at higher price carried over from fiscal 2008 and can’t largely decrease H-beam price.

H-beam market price was already lower than makers’ selling price. Consequently, dealers are getting a loss once every sale. Dealers can’t give out an order to makers if makers don’t reduce the selling price. Many dealers forecast integrated steel makers decrease the selling price of H-beam anytime soon. Dealers are paying attention Nippon Steel’ announcement in April 8.