In line with other domestic mini-mills such as Tokyo Steel Manufacturing, Kyoei Steel, Japan's largest rebar producer, has announced that it is rolling over its prices of rebars at all its production bases for August sales.

"The domestic market continues to experience sluggish demand and cargo movement, but logistics facilities and large investment projects, including data centers, are still being planned in the future," the company said in a statement.

"Although it may be hard to predict, demand is expected to remain firm," Kyoei said, adding that it would "strictly enforce" the minimum price of Yen 115,000/tonne ($702/t) for base size bars.

"Also, since (July-August) is the period when each mini-mill company conducts regular summer maintenance, production cuts can lead to a healthy supply-demand split," it pointed out.

Osaka-based Kyoei had announced back in May that it was increasing its rebar prices by Yen 15,000/t and that the lowest price it would accept for base-sized bars would be lifted to Yen 115,000/t, from Yen 100,000/t in January, as Mysteel Global had reported.

Kyoei never reveals its list prices but it's clear that market conditions have certainly improved over the past three months. Back in May, steel distributors and building contractors in Osaka, Kyoei's home market, were generally paying Yen 92~93,000/t for 16-25 mm diameter SD295 rebar, as assessed by industry daily Tekko Shimbun, whereas this week, they are paying Yen 103~105,000/t.

"On the other hand, geopolitical risks, including those related to the Middle East situation, remain unresolved, with soaring prices and supply concerns for oil-related products persisting," Kyoei admitted. "As energy and logistics costs, including electricity rates, continue to rise in the second half of the year, the cost environment will put significant pressure on manufacturers, making profitability even more challenging," it admitted.

Although Kyoei might be feeling confident about demand going forward, the company might be being a little optimistic. A regular meeting of the country's National Association of Small Bar Manufacturers and Distributors held last Thursday heard that "current offers (for small bars including rebars) from end-use industries remain sparse in each region and demand lacks momentum."

On the most recent industry figures for May in the Kansai region which covers Osaka, Sakai, Kobe and Kyoto, the total floor area of new construction projects started was 944,000 sq metres, lower by a huge 29% from May last year, while within that, construction on reinforced concrete structures (needing rebars) totaled just 219,000 sq m, lower by 65% on year.

Recent Japan Iron & Steel Federation data show that during January-June this year, Japan's output of small bars (mostly rebars) had totaled 3.13 million tonnes, lower by 4.8% on year.