Rebar Output to Down by 10% to 3.5MT around Tokyo in F2007

Local production of concrete reinforcing steel bar would decrease by 10% to around 3.5 million tonnes around Tokyo in fiscal 2007 ending March 2008 compared with fiscal 2006. The production was 1 million tonnes in April-June 2007, down by 2% from the corresponding period of 2006, and 900,000 tonnes in July-September almost as flat as the corresponding period of 2006. The production is expected to decrease widely in the second half of fiscal 2007 under the influence of Japanese building standard law revision. Local rebar makers already announced they plan to decrease rebar output by 10-20% in the second half of fiscal 2007. However, more output reduction might be needed to sustain the market price.Local rebar production was 3.9 million tonnes around Tokyo in fiscal 2006 which was as much as the bubble economy season in Japan. The production was almost at the same level in the first half of fiscal 2007 from a year earlier thanks to active constructions of condominiums and office buildings in the region. However, new orders from general contractors are delayed after the revision of Japanese building standard law. Local rebar maker source said the impact might continue within 2007.Rebar makers’ current production and shipment are not in balance with actual demand. Local rebar production was 310,000 tonnes around Tokyo in September, up by 12% from previous month and down by 7% from a year earlier, and shipment was 290,000 tonnes, up by 1% from previous month and down by 10% from a year earlier. Both output and shipment increased from August. Monthly inventory was 190,000 tonnes in September, up by 15% from August and up by 21% from September 2006. Supply and demand balance might become easier.