Japanese domestic demand remained stable through June. While residential housingconstruction has been weak since April, construction of infrastructure projects as well asgradual progress on Olympic Games facilities supported the overall demand from this sector.The majority of these projects are built on long-term contracts, meaning that they have tocontinue no matter how high the costs are or how well the rest of the sector is performing.Given this, domestic mills had to produce rebar using a highly overvalued scrap from thedomestic market, usually making very thin margins or even losing money.
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