Posted on 24 Sep 2020
Japan’s domestic rebar prices have been on the rise as a result of price increments by the steel producers, though the actual demand has remained sluggish, which makes it uncertain whether the spot dealing prices will fully fulfilled the rises initiated by producers in the end, distributors based in Tokyo and Osaka pointed out.
As of September 23, the SD295 16-25mm rebar in Osaka have been up by Yen 1,000/tonne ($10/t) on week to Yen 61,000-62,000/t, while the prices in Tokyo are still transacted at Yen 66,000-67,000/tonne ($628-637/t), unchanged on week, though local customers have stopped asking for extremely lower-priced supplies, according to the Tokyo sources.
The rise in Osaka is due to the fact that some local steel distributors have lifted their offering prices by as much as Yen 2,000/t on week, and “more have followed the practice including some in Tokyo, and we expect prices in Tokyo will soon rise too,” a distributor in Tokyo predicted.
The signs of modest strengthening in both the markets are in response to the recent price rises by the Osaka-based Kyoei Steel, Japan’s largest rebar producer, that raised its rebar price by Yen 3,000/t ($29/t), and Tokyo Steel Manufacturing, Japan’s top electric-arc-furnace producer, also lifted its rebar prices by Yen 2,000/t, both for October sales and on higher input costs especially scrap that had touched the year’s high.
New rebar bookings in the spot market, however, have been stagnant, as many buyers had replenished sufficient volumes way back by the end of July on the anticipation of price rises, and the stocks may last until sometime in mid-October, according to market sources.
The Tokyo distributor, therefore, expressed his concern on the sustainability in the rebar price rise, as “the price movement is rather unusual, as it is moving up while while demand is low”.
A Tokyo-based construction steel trader shared the doubt, adding that scrap price movement is another factor that may stall the rebar price rise.
“The scrap prices have been hovering high, but it seems to have reached the peak, and domestic scrap prices may soon decline following the weakening export prices, and once it happens, rebar buyers will probably push for lower prices again,” he warned.
Japanese ferrous scrap export prices have declined by $5-8/t on week as of Monday, as overseas buyers have been looking for alternatives to replace the too expensive Japanese supplies, as reported.
On the other hand, most of Japanese rebar producers may not give in easily, as many of them have already had their October rebar output fully booked with some even fully booked for November, the Tokyo trader added, so “they will be in no hurry to receive new orders, and will be able to hold onto their high prices”.
Besides, the Japanese rebar producers have not ramped up their output much, as in July, Japan produced 658,000 tonnes of small bars in July, up 0.3% on year or almost flat on month, and among the total, over 90% were believed to be rebars, as reported.
Written by Yoko Manabe, yoko.manabe@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
Source:Mysteel Global
