Rebar Output Drops by 8% around Tokyo in F2007

Concrete reinforcing steel bar output decreased by 8% to 3.5 million tonnes around Tokyo in fiscal 2007 ended March 2008 from fiscal 2006. The makers reduced the output with slower shipment especially since autumn 2007 due to impact by new building standard law started June 2007. The makers try to keep appropriate production level to meet the slower demand when the slower demand is expected to continue through first half of fiscal 2008. The rebar shipment decreased by 8% to 3.5 million tonnes in fiscal 2007 from fiscal 2006. The makers tried to increase the export of billet and rebar since late 2007 but the higher export failed to cover slower domestic shipment. With recent higher yen rate, they reduce the output and shipment under lower profitability for export. Many makers plan lower output volume by increasing idling time during major holiday from end April to early May though they normally expand the output under lower electricity cost. The rebar output and shipment increased by 10% to 280,000 tonnes in March from February while the volume was 10% lower than a year earlier. The makers try to reduce low priced order backlog while they still keep 5-6 months of order. Their shipping price is estimated to be averaged 70,000 yen per tonne, under which they post monthly loss under higher ferrous scrap cost. They try to improve the selling price level but they could take more months to regain profitability under current raw materials condition.