Chinese Wire Rod Products Increases Presence in Japan

Japanese import of carbon steel wire rod increased by 9.3% to 19,839 tonnes in August from July while the steel wire products import increased by 8.7% to 12,498 tonnes. The imported products increase the presence in Japanese market when the wire products makers and dealers purchase low-priced material during stagnation in construction and civil engineering work. The price of wire rod in China is decreasing from mid August and imported galvanized wire price, which is purchased as the material for fabricated products, is 40,000-50,000 yen per tonne lower than domestic products. Japanese industrial sources see the low price of imported products could cause the decrease of market price in domestic products and electric furnace steel makers have difficulty increasing wire rod price.

One wire products dealer source said that Japanese market is in difficult situation. The dealer has some inquiries for civil engineering work. However, the inquiries may not become the order when Japanese government reviews the budget for public works after a regime change. It is unforeseeable the demand for civil works increases as expected. The sources said wire products demand for construction remains low.

Chinese wire rod price would continue to decrease. Japanese industrial source sees the imported wire rod price turned upward in the beginning of 2010. Current import price is estimated 53,000-55,000 yen per tonne. Japanese electric steels seem to have difficulty increasing wire rod price, especially, low grade items competing with the imported.