Japanese Major Steel Dealers Expect Market Price Upturn in Spring 2010

Steel product wholesalers around Tokyo and Osaka forecast the market prices of steel products would surge up this spring, according to Japan Metal Bulletin’s survey for major 56 wholesalers dealing shapes, rebars, tubes, wires and colored sheets. The survey was implemented in early February around Tokyo and Osaka. 91.1% answered the market circumstance maintains low for February-March and 33.9% answered the supply and demand balance keeps loose for February-March. Meanwhile, 33.9% answered the market price is in uptrend expect for secondary processed products.

As to the current market price trend, 28.6% answered upward while 41.1% answered downward. As to the demand volume, 12.5% answered increasing while 41.1% answered decreasing. 47.4% wholesalers answered the supply and demand balance is currently tight while 45.6% answered loose. Compared with the previous survey, the answers are increasing those which indicate the upward market price, the demand recovery and the tightening supply.

32.7% wholesalers answered their inventories keep flat from the previous survey while 67.3% answered the inventories decreased. The inventory adjustment has progressed since the previous survey. 66.1% answered they don’t increase or decrease the new employee number while 30.3% answered they plan to reduce the new employee number. Wholesalers’ management is impacted by the severe market condition

Wholesalers are suffered from low sales and worse profitability due to the reduction of public construction projects and private corporate investment. In 2010, some dealers enter mergers or acquisitions of other players’ businesses. Sanei Kinzoku, a major small dealer around Osaka, acquired the business from Maruichi Kosan. Mitsui Corporation acquired 15% shares of Imai Kinsyo, a major dealer in Hokkaido. Igeta Sun Rise Pipe, a major steel tube dealer, and Maruyoshi Syoji are scheduled to be integrated.