High Level Rebar Output around Tokyo

Concrete reinforcing steel bar output is expected to increase by 18% to around 4 million tonnes around Tokyo in 2006 from 2005. The output was 350,000 tonnes in November, which was 2.2% lower than October and 11.8% higher than a year earlier. The output increased by 16% to 3.591 million tonnes in January-November, which was the highest level since bubble economy, from same period of 2005. The output is likely to keep firm in 2007 when the makers have 3-3.5 months of order backlog and expect the demand will keep high at least for the first half year.

Local rebar shipment was 335,000 tonnes in November, which was 1.2% lower than October and 7.4% higher than a year earlier. The output increased by 13% to 3.518 million tonnes in January-November from same period of 2005. The makers including base size makers and smaller sized bar makers manage to meet the delivery schedule under tight production schedule when the demand increases for major building projects in December though the purchase activity was delay. The rebar inventory was 190,000 tonnes at the end of November, which was 9.7% higher than October and 54.4% higher than a year earlier.

Local rebar market price is around 60,000 yen per tonne for base size with 19 millimeters diameter. The makers realized 1,000 yen of higher selling price after they announced 2,000 yen hike in October. They try to realize additional 1,000 yen in the year. They try to increase the margin when ferrous scrap price increased to more than 30,000 yen per tonne. They decided to increase the selling price to improve the profitability.