The likelihood that the Tokyo Olympics will be held as planned at the end of this month and not canceled despite the rise in coronavirus cases is forcing Japanese steel industry insiders doing business in and around the capital to prepare to delivery delays and other disruptions. The Olympic Games in Tokyo are scheduled for 23 July-8 August, and the Paralympic Games are scheduled for 24 August-5 September.
The central government of Japan and the Tokyo Metropolitan Government have already decided to restrict traffic in and around Tokyo from July 19 to August 9 and from August 24 to September 5 to prevent traffic congestion and improve safety, and that fares for private vehicles will be upgraded by yen. USD 1,000 per tonne (USD 9 per tonne) over the period to prevent non-material movement.
A sales rep with an integrated factory was unsure if the Olympics would end up taking place, given the continued rise in COVID-19 cases in Tokyo and the strong opposition from 80% of the population. “But these days we are seeing full-scale preparations for the Games begin, and many in the steel industry must rush and prepare, for example to build up stocks – although the impact of supply delays will certainly continue,” he warned.
As a hint of what is expected, Japan Post Co announced on July 5 that it expects delivery delays to Tokyo and nine prefectures during the Olympic and Paralympic Games. Major courier services have also alerted customers to delays in the start of the Games.
Companies shipping scrap from ports in the Tokyo Bay area expect slower scrap shipments due to traffic restrictions, and most are restocking their scrap stock in advance, a Tokyo-based trader said Friday. “But the supply of scrap metal to the shipyard will also decline during the Games, and scrap production will decline due to the slowdown in construction and the large number of public holidays that have been postponed to this period. There is no doubt that the supply of scrap metal in Tokyo will decrease, ”he predicts.
Mysteel Global notes that as an additional measure to reduce traffic congestion during the events, the Japanese government has also postponed some national holidays, moving Sports Day (October 11) to July 23, the day of the opening ceremony. Likewise, Marine Corps Day (July 19) has been pushed back to July 22, the day before the ceremony, and Mountain Day (August 11) has been pushed back to August 8 for the closing ceremony of the Games. And since that day is Sunday, August 9th will be a substitute holiday, according to the official announcement.
The Tokyo government has decided to suspend government civil construction for 35 days for road construction and 25 days for other construction projects. Sources note that the city government has also asked general contractors to cooperate to reduce the number of trucks on major roads during this period, the sources note, although the government did not immediately ban construction.
“This worries us,” said a sales representative for the mini-factory. “If construction is halted during this period, our delivery plans will have to be revised,” he lamented.
“The government has just decided that the competition will be held without spectators,” he explained. “The lower traffic could cause some contractors who planned to stop working to change their minds and continue working, making the organization of supplies more confusing and unclear,” he added.
Meanwhile, Japanese Prime Minister Yoshihide Suga officially announced on Thursday that a fourth state of emergency will be declared in Tokyo from July 12 to August 22 in another attempt to stave off the rapidly growing number of COVID-19 cases.
But sources in the iron and steel industry said disruptions due to this new event would be limited. “But uncertainty remains because declaring a fourth emergency while hosting the Olympic Games could have unintended consequences,” warned another steel trader in Tokyo.