Higher Yen Rate Suffers Japan Electric Furnaces

Japanese electric furnace carbon steel makers’ profitability is suffered from higher yen rate along with higher cost for ferrous scrap and materials. They stop export offer of products and billet under higher yen rate. The concrete reinforcing steel bar makers are estimated to lose around 15,000 yen per tonne due to lower shipping price and higher cost. The largest electric furnace steel maker of Tokyo Steel Manufacturing stopped the export offer since February. The firm tries to meet domestic demand under less availability of scrap. The firm expects around 300 million yen of recurring profit for January-March compared with 4.8 billion yen of profit for same period of 2007. The largest rebar maker of Kyoei Steel said the volatile yen rate could impact the export business while the higher yen rate could impact little for spot export deal. The firm revised the outlook downward by 3 billion yen for operating and recurring profit and by 2 billion yen for net profit for full year to March 2008 compared with former estimate. Rebar makers are losing 12,000 yen per tonne with 68,000 yen per tonne of shipping price and 50,000 yen of scrap cost. The higher scrap market could suffer the profitability. They try to cover the lower domestic demand through export of rebar and billet but the higher yen rate prevents the diversion.