Japan Kyoei lifts May rebar base prices by $77/t on costs

Kyoei Steel, Japan's largest rebar producer, has decided to lift its rebar base prices by Yen 10,000/tonne ($77/t) on month to Yen 120,000/t, mainly to transfer the rise in production costs and to improve its profitability, according to the company.

A company official explained that scrap prices have risen by about Yen 6,000/t on month and other costs such as alloy, electrodes and energy charges have also been rising since April.

"Japanese Yen has been weakening, and our costs may rise further. So we may need to adjust our prices before the next monthly price announcement, or we may have to stop offering," he warned.

The Osaka-based mill's latest price policy will apply to all rebars produced at its four plants across Japan and to its domestic sales, but the company's price hike for rebars produced at its Yamaguchi Works in western Japan will be by Yen 5,000/t because it had already added Yen 5,000/t effective from April 13.

The official noted that most rebar producers must have already filled their productions for April and May with orders placed in February and March on the anticipation of price rise, so actual sales this month will be limited. "But our price still needs to be lifted because it will have to push market prices higher," he added.

A Tokyo-based dealer said that with the latest decision by Kyoei, most rebar producers in Japan have tabled Yen 120,000/t for their list prices. "Dealers will prioritize their prices and target around Yen 120,000/t," he predicted.

As of April 20 morning, deals for SD295A 16-25mm rebars in Tokyo were transacted at Yen 115,000-118,000/t, up Yen 4,000/t on month and those in Osaka were Yen 109,000-110,000/t, up Yen 7,000/t on month, according to market sources.

Written by Yoko Manabe, yoko.manabe@mysteel.com

This article has been published under an exchange agreement between MySteel Global and SteelMint.