Nippon Steel Cuts H-Beam Price by 40,000 yen/t

Nippon Steel announced on Thursday the firm reduces the selling price of H-beam by 40,000 yen per tonne or more than 30% for distributors for February. The widest ever reduction is the first drop in 3 years and 4 months. The firm, which increased the price by total 45,000 yen or 60% in 2008, decided the adjustment to eliminate the gap with domestic rivals and international price. The firm accepts the order for the first time in 4 months after the rejection to reduce the inventory. The firm keeps the price level for spot market and fixed outer dimension beam.

The firm said the firm tries to stabilize the market by adjusting the commodity grade product’s price under the current market condition including offshore market. The firm expects with the reduction the market would find the bottom.

The firm tries to minimize the order receipt from the dealers to reduce the inventory level more when the dealers should reduce the inventory through at least March despite of the decreases for 2 months in a row to January while the firm accepts some orders for stock out sizes.

A dealer source said the price down wouldn’t impact on the market when the market already expected the reduction. However, the dealers cannot purchase materials under the overstock condition despite of the lower price. The dealers’ order is expected to be limited volume.

Nippon Steel announced on Thursday H-beam stock held by members of Tokiwa-kai, which is a group of distributors dealing Nippon Steel’s products, decreased by 4.3% to 260,700 tonnes at end of January from December. The inventory rate for shipment increased to 3.03 months due to slower shipment from 2.89 months in December. The inventory adjustment could take more time to normal level when the demand decreases with postpone and cancel of building plans.

Nippon Steel sees the production cut by makers contributed to the lower inventory while the dealers’ shipment was slow. The firm expects with the pace, the inventory adjustment would finish by March.

The stock of Tokyo, Osaka and Nagoya decreased by 6.1% to 123,000 tonnes at end of January from December while the stock in other 8 areas decreased by 2.5% to 137,700 tonnes. The stock decreased in all areas except in Niigata. However, the shipment decreased by 5.3% in Tokyo, Osaka and Nagoya. The supply balance is still overstock due to slower demand.