Tue Aug 9, 2011
TOKYO Aug 9 (Reuters) - The strong yen and Japan's weak construction market may prompt Tokyo Steel Manufacturing Co , the country's biggest construction steel maker, to slash prices for a second time this year, by around 5 percent, industry officials said.
The yen's ascent to a near record-high against the dollar has caused a gradual rise in low-priced imports from China and South Korea, dragging down a market that has yet to recover from a severe slump induced by an earthquake in March.
"The market environment is so tough that Tokyo steel will be forced to cut its September prices by as much as 3,000 yen to 5,000 yen per tonne," an industry official said.
A price cut would further delay recovery in the country's steel market, making it difficult for steel makers to push up prices even if demand picks up later this year from an increase in government spending on reconstruction, they said.
Builders have delayed construction of condominiums and big buildings amid uncertain demand, while reconstruction work in the devastated areas of northeast Japan has yet to start due to a delay in government spending.
Japan's imports of carbon steel in June rose to an almost six-year high of 420,000 tonnes. China's steel exports exceeded 4 million tonnes for the fourth straight month in June, causing an oversupply in Asia's export market.
Sluggish demand in the domestic market has boosted Nippon Steel Corp's inventories of H-beam steel used in construction of buildings to a 17-months high of 215,400 tonnes at the end of June.
Tokyo Steel will announce its September prices on August 22. The company in June cut its prices for all steel products for the first time in seven months. It reduced the price of H-beam steel used in construction by 6.2 percent to 76,000 yen ($979)per tonne. ($1 = 77.670 Japanese Yen) sourced Thomson Reuters
TOKYO Aug 9 (Reuters) - The strong yen and Japan's weak construction market may prompt Tokyo Steel Manufacturing Co , the country's biggest construction steel maker, to slash prices for a second time this year, by around 5 percent, industry officials said.
The yen's ascent to a near record-high against the dollar has caused a gradual rise in low-priced imports from China and South Korea, dragging down a market that has yet to recover from a severe slump induced by an earthquake in March.
"The market environment is so tough that Tokyo steel will be forced to cut its September prices by as much as 3,000 yen to 5,000 yen per tonne," an industry official said.
A price cut would further delay recovery in the country's steel market, making it difficult for steel makers to push up prices even if demand picks up later this year from an increase in government spending on reconstruction, they said.
Builders have delayed construction of condominiums and big buildings amid uncertain demand, while reconstruction work in the devastated areas of northeast Japan has yet to start due to a delay in government spending.
Japan's imports of carbon steel in June rose to an almost six-year high of 420,000 tonnes. China's steel exports exceeded 4 million tonnes for the fourth straight month in June, causing an oversupply in Asia's export market.
Sluggish demand in the domestic market has boosted Nippon Steel Corp's inventories of H-beam steel used in construction of buildings to a 17-months high of 215,400 tonnes at the end of June.
Tokyo Steel will announce its September prices on August 22. The company in June cut its prices for all steel products for the first time in seven months. It reduced the price of H-beam steel used in construction by 6.2 percent to 76,000 yen ($979)per tonne. ($1 = 77.670 Japanese Yen) sourced Thomson Reuters
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