Posted on 23 Feb 2023
After rolling over its domestic prices for the past two months, Osaka-based mini-mill Kyoei Steel, Japan's largest rebar producer, is adding Yen 5,000/tonne ($37/t) to its domestic prices of rebars for March sales to offset rising costs, the company announced on Tuesday. Kyoei had lifted its rebar prices by the same Yen 5,000/t for December sales, as Mysteel Global reported.
"Last year, the floor area of new starts on reinforced concrete construction increased by about 12% compared to the previous year, (while currently) inquiries for development projects and for large-scale logistics warehouses are steady," Kyoei said in a statement. "On the other hand, the market for scrap, which is the main raw material, continued to be affected by overseas market conditions and seasonal factors, and prices have been on an upward trend," it said.
Kyoei never reveals its exact list prices but as of Wednesday morning, deals for SD295A 16-25mm rebars in Osaka were being transacted at around Yen 108,000/t while those in Tokyo were at Yen 121,000/t, according to market sources.
That Kyoei would likely raise prices for March had been widely expected after Tokyo Steel Manufacturing – Japan's largest independent mini-mill – announced on Monday that it was raising prices of its rebars and those of certain H-beams for March by Yen 3,000/t, as reported.
Industry watchers had several explanations for why Kyoei's margin of increase was higher than Tokyo Steel's.
"Rebar prices in the Kansai area (around Osaka) have been lower than in Tokyo, but supply has been tighter, so Kyoei must be trying to lift market prices higher to narrow the gap," said one. "And maybe Kyoei is sending a message to other rebar makers to follow its price lead, not Tokyo Steel's!"
But another reason could be the difference in product mix. Tokyo Steel produces over 15 different types of products – everything from hot dipped galvanized coils to sheet piles – and so higher costs can be spread more widely through its catalogue. In fact, its production of rebars is tiny.
"On the other hand, rebar producers can only offset higher costs with their rebar prices – which are lower than those of other products. That may be another reason why Kyoei decided on a larger increment," the Tokyo source suggested.
During last calendar year, Japan produced 7.69 million tonnes of small bars including rebars, lower by 1.3% from the year before, Japan Iron & Steel Federation data show.
Source:Mysteel Global
