Posted on 12 Jul 2021
The likelihood that the Tokyo Olympic Games will be held as planned later this month, rather than cancelled despite rising coronavirus cases, is forcing Japanese steel industry insiders doing business in and around the capital to brace for delays to deliveries and other disruptions. The Tokyo Olympics are scheduled for July 23-August 8 and the Paralympic Games during August 24-September 5, Mysteel Global notes.
Japan’s central government and Tokyo Metropolitan Government have already decided to restrict traffic flows in and around Tokyo during July 19-August 9 and August 24-September 5 to prevent road congestion and enhance security, and that highway tolls for private vehicles will be raised by Yen 1,000/t ($9/t) during the period to dissuade non-essential traffic.
A sales official with an integrated mill had been unsure about whether the Olympics would finally be held, given the continuing rise in COVID-19 cases in Tokyo and the staunch opposition of 80% of the population to the event. “But these days we’re seeing full-scale preparations for the Games begin, and many in the steel industry must rush and prepare such as building up inventories – though the impact from delays to deliveries will remain, for sure,” he warned.
In a hint to what’s expected, Japan Post Co announced on July 5 that it expects delays to deliveries in Tokyo and nine prefectures during the Olympics and Paralympics period. Major courier service firms have also warned customers that there will be delays will the Games are underway.
Companies shipping scrap from Tokyo Bay area ports anticipate slower scrap deliveries because of the traffic restrictions, and most are topping up their scrap stockpiles in anticipation, a scrap trader in Tokyo said Friday. “But scrap arrivals at yards will decline during the Games too, and scrap generation will fall because of the slowdown in construction and the large number of public holidays that have been rescheduled for that period. There’s no doubt scrap supply in Tokyo will become tighter,” he predicted.
As an additional measure to ease the pressure on roads during the events, the Japanese government as also shuffled around some national holidays, Mysteel Global notes, with Sports Day (October 11) moved to July 23, the day of the opening ceremony. Similarly, Marine Day (July 19) is moved to July 22, the day before the ceremony, while Mountain Day (August 11) has been brought forward to August 8 for the Games’ closing ceremony. And since that day is a Sunday, August 9 will be a substitute holiday, according to the government release.
The Tokyo government has decided to stop public civil engineering for 35 days for road construction and 25 days for other civil engineering projects. The city government also requested that general contractors collaborate to reduce the number of trucks on major roads during the period, sources note, though the government stopped short of temporarily banning all constructions outright.
“That is a concern for us,” a sales official from a mini-mill said. “If construction is stopped during the period, our product delivery plans would have to be revised,” he lamented.
“The government has just decided that competition events will be held without spectators being present,” he explained. “The lighter traffic may lead some contractors – who were planning to halt work – to change their minds and continue, making arranging steel deliveries more confusing and unclear,” he added.
Meanwhile, on Thursday Japan’s prime minister, Yoshihide Suga, formally declared that Tokyo would be placed under a fourth state of emergency from July 12 to August 22 in another attempt to thwart the fast-rising cases of COVID-19 infections.
But steel industry sources said disruption from this new SoE will be limited because there was less impact from the second and third SoEs in April to June. “But uncertainties remain because declaring a fourth emergency while at the same time hosting the Olympics may produce unintended consequences,” another steel trader in Tokyo warned.
Source:Mysteel Global
