Carbon Steel Wire Products Drop around Tokyo

Carbon steel processed wire products market price decreased by 2,000-5,000 yen per tonne around Tokyo. The price is 160,000 yen for annealed wire, 145,000 yen for carbon steel wire and 158,000 yen for round nail with 100 millimeters length. The market price could decrease more when the slower demand pressures on the market price despite of the high cost price for wire rod.

The processors’ operation decreased to around 50% of a year earlier level. The dealers’ sales volume is also 70-80% of a year earlier level. The demand is expected to keep low level while the demand usually increases toward fiscal yearend in March. The dealers’ sources said some transaction price is already 2,000-3,000 yen per tonne lower than the prevailing level. The price is expected to decrease more.

The market price increased smoothly when the buyers try to secure the materials stably after the processors increased the selling price in April and July 2008. The processors and dealers posted inventory valuation gain. However, the demand started to decrease sharply in August 2008. Domestic wire rod makers announced additional price hike in October but they canceled the hike. The dealers have high priced overstock. The price decrease could force to the dealers to post major inventory valuation loss.

Carbon steel wire rod inventory was 128.3% of the shipment in December 2008, which was 5.2 percentage points higher than November and more than double of a year earlier level, according to Japan Wire Products Association.