Price of Long Steel Products Increases in Tokyo

Price of steel products for construction started the year with increasing tone around Tokyo under strong building demand. The local makers try to increase the selling price of concrete reinforcing steel bar price by 3,000 yen per tonne or 5% for January order. They try to pass the higher ferrous scrap price on the selling price under growing private sector building demand including condominium and office building. H-beam price is also expected to increase after integrated steel makers increased the price by 2,000 yen late 2006. Local rebar makers increased the selling price by 3,000 yen to 62,000 yen per tonne for base size products with 19 millimeters diameter for January. They try to pass higher cost for scrap, price of which increased by around 10,000 per tonne or 40% in 2006, under strong demand. The rebar selling price is the highest level since babble economy. However, the rebar makers try to improve the profitability through the hike under higher scrap price. The distributors also try to increase the reselling price. The selling price to general contractors by trading firms is likely to increase to 63,000-64,000 yen per tonne for new order. The smaller distributors increase the selling price to 68,000 yen for small lot immediate shipment from their inventory. Local rebar shipment is estimated to be around 4 million tonnes in 2006 as high as that in babble economy era. The demand is expected to keep firm in 2007. Japanese largest H-beam maker, Tokyo Steel Manufacturing increased the selling price of H-beam by 1,000 yen per tonne for January order after 2,000 yen hike by integrated steel makers in September and October. The distributors try to pass the higher cost price on the reselling price from current 75,000 yen per tonne. Demand for construction steels including rebar and H-beam is expected to keep firm in 2007 and the prices are also likely to keep increasing. Osaka based rebar maker, Nakayama Steel Products increases the selling price by 3,000 yen per tonne for January order starting the sales on Wednesday. The firm decided additional hike to pass higher cost price and to increase the lower price than other areas and other long products after the 1,000 yen hike for December order. The firm has around 2 months of order backlog under firm demand around Osaka.