Cloudy Japan Wire Rod Makers’ Price Hike

Japanese electric furnace steel wore rod makers’ effort to improve the selling price is likely to be tougher than expected for commodity grade products. They showed the willingness for price hike when offshore market price rebounded and ferrous scrap price increased. However, their price hike could be resisted when the surrounding situation has changed since mid-September.

Japanese market price had decreased for carbon steel commodity grade wire products for building and civil works including mesh, steel wire and galvanized wire since January when price of imported wire rod mainly from China decreased since late 2008. The domestic market price is hitting bottom recently but the price is till weak due to slow construction demand.

Tokyo Steel Manufacturing reduced the selling price of wire rod by 32,000 yen or 32% to 72,000 yen per tonne in November 2008. The firm reduced the price gradually to 63,000 yen for October 2009 order.

Other makers including Godo Steel and Nakayama Steel Works finally reduced the selling price for some carbon steel wire rod items in April and May while they tried to keep the price level despite of the decreasing market price of wire products. The makers adjusted the price of commodity grade products to compete with cheaper imported rod.

The import price from China and South Korea rebounded in July and August while scrap market price recovered 30,000 yen per tonne for H2 at purchase price by electric furnace steel makers. The domestic wire rod makers decided the price hike for the items, for which they reduced the price earlier the year.

However, the import price for Chinese products decreased since mid-September while scrap price decreased to around 25,000 yen per tonne for H2. The domestic wire rod makers try to improve the profitability through the price hike under low level capacity utilization due to slow demand but the market condition gets severer.