Japan Rebar Demand to Drop by 10% in April-June

Japanese demand of concrete reinforcing steel bar is likely to decrease by around 10% to around 2.7 million tonnes in April-June from same period of 2007. A rebar maker source concerns the demand could decrease more when condominium sales decrease due to the higher selling price along with the slower building activity nationwide caused by the new building standard law. The market has uncertainty when general contractors revise the building plan, mainly for small and medium sized building under slower demand and higher steel and materials price. The rebar demand in April-June increased to 3 million tonnes in 2007 from 2.87 million tonnes in 2006 and 2.64 million tonnes in 2005 when condominium construction has increased for years. However, the building activity turned into decrease, especially for smaller sized condominium after the start of new building standard law in June 2007. The slower demand is also due to higher condominium sales price. The contract rate dropped widely in 2008 and the vacancy rate grows. General contractors revise and postpone some building plans reducing rebar demand. The rebar demand could decrease for July-September compared with 2.72 million tonnes in the same period of 2007. The demand is estimated to decrease in fiscal 2007 ending March 2008 from 11.33 million tonnes in fiscal 2006, which is the first drop in 4 years. The rebar industry concerns the demand shrink and some interests expect the demand could decrease by around 10% for fiscal 2008 due to slower building activity.