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| Determined Small Bar Sector Necessary To Meet Rising Raw Matl Costs: Assn Chairman |
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Japan's various electric steelmakers need strenuous efforts to meet rising costs of raw materials in their small bar production because domestic demand for small bars has begun to bottom out at long last, according to chairman Eiji Hashimoto with the national association of small bar manufacturers and distributors. He is concurrently a corporate officer and the general manager of building materials at Nippon Steel Corp, the nation's largest integrated steel company. Hashimoto made his comments at the press conference the association held March 24 after its steering committee met. The following are an outline of what he said at the press conference. <>Domestic demand for small bars has yet to hit bottom, but it has begun to bottom out after a long lapse time. Therefore, various electric steelmakers should go back to the starting point with a determined mindset to cope with rising costs of raw materials. <>It is steel demand growth that represents the rood cause of the ferrous scrap market on the rise. Ferrous scrap prices will go up accordingly when demand for finished steel products increases because there is little possibility of a decline in the world's steel requirements. Meanwhile, the following were domestic market conditions for small bars and locally available ferrous scrap as of March 19 in the survey conducted by the Japan Iron & Steel Federation. Hokkaido - With a slack demand season, new inquiries for small bars were limited despite some requirements arose in relation to construction of condominiums and a Shinkansen bullet train system. Ferrous scrap prices, though, were trending upward amid slack demand for small bars. There were forecasts that annual demand for small bars in fiscal 2010 would compare with the level of fiscal 2009. Prices of local ferrous scrap rose by Y3,000 from a month ago to Y30,500-34,000/ton ex steelworks for No2 HMS. Sendai/Niigata - There were no follow-up moves after assorted orders for small bars arose in February. Demand for small bars continued slack, while construction starts of new condominiums were limited. Electric steelmakers had order backlogs of small bars for 1.5 months of production, with a rolling wait of 1-1.5 months. Prices of local ferrous scrap rose by Y6,500 from a month ago to Y33,500-35,500/ton ex steelworks for No2 HMS. Electric steelmakers enjoyed arrivals of local ferrous scrap that equated with 100% of required levels at their works. Kanto - General construction companies placed increased small bar orders with steel mills in the January-February period. Besides, inquiries were on the increase since the beginning of March. In this connection, major construction companies began to take small bars required in urban renewal projects, while new deals to sell existing condominiums started to shape up. Electric steelmakers had order backlogs of small bars for three months of production in base sizes and 21/2 months of production in thinner sizes. Prices of local ferrous scrap rose by Y3,500 from a month ago to Y33,000-38,000/ton ex steelworks for No2 HMS. Export shipments of ferrous scrap were trending downward in the Tokyo Bay area. But westbound domestic shipments were perking up, leading to a strong Kanto market for local ferrous scrap. Chubu - New inquiries for small bars were inactive. But there was talk of futures deals for delivery from May onward as a further upswing was forecast in the small bar market. Small bar shipments were in bad shape, while inquiries were active for supplies into steel distributors' warehouses. Electric steelmakers had order backlogs of small bars for 2.5 months of production in base sizes and two months of production in thinner sizes, with a rolling wait of 2.5 months for base sizes and that of 2.2 months for thinner sizes. Prices of local ferrous scrap rose by Y5,500 from a month ago to Y34,000-35,000/ton ex steelworks for No2 HMS. The Chubu market for local ferrous scrap was expected to continue strong for a medium term. Main factors were increased ferrous scrap consumption by electric steelmakers for eased production cuts at their works, increased purchases of local ferrous scrap by a major integrated steelmaker, and decreased arisings of local ferrous scrap. Electric steelmakers enjoyed favorable arrivals of local ferrous scrap at their works on the whole. Kansai - Construction starts of new condominiums in the Kinki district indicated a year-on-year fall of 15%. Electric steelmakers saw intake growth of assorted orders for small bars in signs of a further upswing in the small bar market. Prices of local ferrous scrap rose by Y5,500 from a month ago to Y36,000-38,000/ton ex steelworks for No2 HMS. Electric steelmakers faced instable arrivals of local ferrous scrap at their works where production levels were on the increase. Kyushu - There was no major improvement in deals of small bars for construction of new condominiums. Amid ferrous scrap prices on the rise, cases arose of front-loaded construction for new condominiums or starts of delayed construction from January to mid-March. Those cases mainly related to midsize condominiums, distribution warehouses, and midsize commercial facilities. It was uncertain, though, whether corresponding cases would continue into the near future. Electric steelmakers had order backlogs of small bars for 1.5 months of production in base sizes and one month of production in thinner sizes, with a rolling wait of 1.5 months for base sizes and that of one month or thinner sizes. Prices of local ferrous scrap rose by Y6,500 from a month ago to Y35,000-36,000/ton ex steelworks for No2 HMS. With limited arisings of local ferrous scrap, arrivals of material stood at 90-95% of required levels at the works of electric steelmakers. |
| last modified : Thu 01 Apr, 2010 [10:04] |
