Kyoei Steel holds rebar prices for July
"Currently, the market has a stagnant demand environment (for construction) due to labour shortages and soaring prices of various materials, and new inquiries have been sluggish," Kyoei said in a statement. "On the other hand, although there are regional differences, the number of construction projects is relatively stable, and although there is no increase in overall demand, it is expected to remain resilient," it said.
From its business viewpoint, Kyoei said that soaring costs such as those for its workforce, for energy and transportation have increased more than expected. "Due to the urgency of these cost situations, the company will strongly press the market for the price increases announced so far and maintain its sales stance," Kyoei said.
Kyoei's decision to roll over prices was not entirely unexpected, as market leader Tokyo Steel Manufacturing had announced on June 17 that it would be keeping its entire production catalogue unchanged for July, as reported. Kyoei never opens its list prices but Tokyo Steel's price for 13-25 mm 'base size' rebars remains at Yen 98,000/t.
A market source in Tokyo said that Kyoei had likely met resistance from customers to its large increase last month. "Buyers were not active to book and not all have agreed to pay the higher prices so Kyoei will have to continue pushing for the previous hike to be accepted," Mysteel Global was told.
Another cost-push factor for Kyoei is the price of scrap, especially that for scrap in western Japan consumed at its mainstay Hirakata works in Osaka. "Both overseas and domestic demand for scrap has been stagnant, but prices have remained in the high range due to the low rates of scrap arising and the depreciation of the yen," it noted.
Mini-mills in Osaka are currently paying Yen 51,500-52,000/t for H2 grade scrap delivered to their works, unchanged from last week but still at a high level.
A contributing factor keeping Osaka scrap prices high is doubtless Tokyo Steel's new scrap stockyard at Amagasaki in Osaka that began receiving scrap from June 3. Named its 'Kansai Satellite Yard' – Kansai being the name of the greater Osaka region – the yard is looking to have a monthly turnover of scrap of 10,000 tonnes, industry sources say.
Though the volume is not so large, the Kansai region and western Japan are chronically short of scrap, which is why scrap dealers in the Kanto area (around Tokyo) ship huge quantities of scrap to mills in western Japan every month, mostly through Tokyo Bay ports such as Funabashi, Kawasaki and Odaiba, as reported.
Tokyo Steel's Amagasaki yard, located only 24 kms by road from Kyoei's Hirakata works, is certain to be a magnet for scrap suppliers and traders and will likely force Kyoei to pay slightly more for deliveries to its works, Mysteel Global notes.
Written by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
Mysteel will host the 2024 International Steel Scrap Conference on September 26, 2024 in Tokyo, registration is now OPEN! Early Bird Rate before August 1st.
Tokyo Steel holds product prices for September
Aug 20, 2024 09:15
Japan's steel scrap prices now lowest in over a year
Aug 07, 2024 14:45
Kyoei signals 'emergency' output cut for dormant rebar mart
Jul 18, 2024 11:00
Japan's scrap market eyes Tahara troubles
May 28, 2024 12:00
Kyoei Steel announces huge rebar price-hike for June
May 15, 2024 16:30
Construction steel procurement prices: Shenzhen
Sep 06, 2024 17:13
Construction steel prices: Shenzhen
Sep 06, 2024 17:12
Construction steel prices: Huizhou
Sep 06, 2024 17:09
Wire rod prices: China's major cities
Sep 06, 2024 17:07
Construction steel procurement prices: Guangzhou
Sep 06, 2024 17:07