Six companies among Japanese 16 electric furnace carbon steel makers posted half-year recurring loss in the first half of fiscal 2011 (April-September 2011). Tokyo Steel Manufacturing lowered its sales price along with international market price and profitability worsened. Sales volume almost halved year-on-year at Nakayama Steel Works. JFE Bars & Shapes was hit by the Japan Earthquake. Daiwa Steel, Asahi Industries and Sumikin Steel couldn’t raise their sales prices enough. The other 10 electric furnaces kept the black and six of them enjoyed year-to-year profit improvement. Hokuetsu Metal and Nakayama Steel Products returned to the black.
In domestic market, demand maintained weak for shape steels in the first half of fiscal 2011 when construction of steel frame buildings was slow. Meanwhile, demand has gradually recovered for rebar adopted to condominiums, schools and residents mainly around Tokyo. On the other hand, average purchase price of ferrous scrap upped by 2,800 yen year-to-year to about 35,000 yen per tonne for H2 grade. Most electric furnaces passed higher material cost on their selling prices. Kyoei Steel and Godo Steel raised the selling price by 3,500 yen from a year earlier, mainly for rebar. Osaka Steel raised the price by 2,700 yen mainly for shape steels. In the second half year, ferrous scrap market price is weakening while steel users such as general contractors are strongly offering price cut against electric furnaces.