The upcoming Japanese consumption tax hike has added a note of caution to the North East Asian long products market in March, with steelmakers wary of pushing for further price increases given demand uncertainty in the months ahead. CRU do not believe the impact on the steel markets will be as severe as in the 1997 downturn, as a 2% rise in public works investment and increased housing tax exemptions will help to soften the impact of April's tax hike on long products demand. The North East Asian long products market has entered the final month of Q1 under uncertain conditions. On the one hand, steelmakers are keen to take advantage of the upcoming seasonal uptick in long products demand and push for further price increases. However, on the other hand, input costs continue to decline, with regional scrap prices currently around $25/t lower m/m.
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