Japan: Deformed steel bar prices touch 13-year high

The prices of deformed steel bars jumped to JPY 110,000 ($922/t) for the first time in 13 years and four months in Kanto, Japan. Price movements in deformed steel bars have been rough so far owing to contraction in sales by electric furnace steel producers, as a result of soaring steel scrap prices. Prices rose sharply by JPY 7,000 ($59) compared to the week gone by.

As of 17 Mar'22, market prices in Tokyo stood in the range of JPY 110,000-113,000 ($922-947) for direct delivery of the base size (SD295, 16-25 mm), and the inventory is assessed at mainly JPY 120,000 to 124,000 ($1,006-1,039).

Due to the rapid growth of steel scrap, major electric furnace steel manufacturers in Kanto have been cautious about price offers to trading companies, distributors and customers since the past week.

Since the beginning of this week, the outlook seems uncertain, combined with the worsening situation in Ukraine, leading to a price hike of JPY 7,000 to 110,000 ($59-922).

A trader source said: "The lower limit for new business negotiations, including small-lot projects from local general contractors, is JPY 110,000 ($922), and it would be difficult to lower prices to the JPY 100,000 level."

"Also, there is no material that could lower the prices on the electric furnace side, where profitability is inevitably deteriorating," he added.

On the other hand, a trading company executive stated: "Most of the estimates ignore actual demand. Confusion is inevitable, but the situation is a little too heated."

Manufacturers of rebars for housing foundations, who purchase deformed steel bars, are irked by the sudden increase in prices. Manufacturers are agreeing to prices with trading companies on a three-month (quarterly) basis, and have no choice but to shorten this to one month.

Note: This insight has been published in accordance with an article exchange agreement between SteelMint and Japan Metal Daily.