Rebar Market Price Might Recover to 60,000 yen/t in Tokyo

Market price of concrete reinforcing steel bar is strong in Tokyo at around 59,000 yen per tonne for products with 19 millimeters diameter. The price is 1,000 yen higher for 13 mm products and 3,000 yen higher for 10 mm products compared with the base size. Rebar order was inactive from general contractors in August. However, the demand recovered mainly for small sized constructions in September and orders for large sized buildings are likely to occur soon. Construction demand is active such for condominium buildings and redevelopment building projects around Tokyo. Electric furnace steel makers and dealers advance price hike.Rebar production around Tokyo was 290,000 tonnes in August, decreasing by 12% from July and increasing by 13% from August 2005. The production became to below 300,000 tonnes for the first time since February 2006 due to outage of seasonal maintenance at local electric furnace steels. Rolling lead time is recently 1-2 months and production schedule is relatively tight. Supply and demand is currently balanced in the market.Local electric furnace steels seek rebar price hike under the situation. They are purchasing ferrous scrap at 28,000-29,000 yen per tonne for H2 grade, the material for rebar. The price is increasing as well as sub material prices. Earnings of electric furnace steels maintained unfavorable since bubble economy burst in Japan and barely recovered to the level they can renew old facilities in late several years.Maker source said the firm aims 60,000 yen per tonne of market price in October when rebar demand seasonally increases. The market price decreased to below 60,000 yen in June 2005 and declined to around 58,000 yen toward spring 2006. The price recovered to around 59,000 yen after spring with active demand for condominium, office building and redevelopment building projects.