Steel Sheet Price Continues Lowering around Tokyo

Japanese steel sheet market price continues dropping around Tokyo. Coil centers or dealers are hurrying to sell high-price inventory due to slower demand. A major coil center source said the firm hopes to readjust inventory as soon as earlier since iron ore and coal prices would decrease in fiscal 2009.

Sheet steel market price is weak at around 77,000-79,000 yen per tonne for hot rolled flat steel around Tokyo. The price is 78,000-80,000 yen per tonne for pickling steel, 95,000-97,000 yen for cold rolled flat steel, 101,000-103,000 yen for hot coil based galvanized steel and 111,000-113,000 yen for cold coil based galvanized steel around Tokyo.

Dealers’ shipment keeps slow. A coil center source said order receipt volume is decreasing by 40-50% over the previous year. Coil centers’ operation rate is lowering largely when production of automobiles or appliances slowed down.

Dealers and coil centers are concerned about inventory readjustment. Japanese hot, cold and coated steel sheet inventory held by makers, distributors and processors increased to 4.707 million tonnes for domestic shipment at the end of December, which hit the record high.

Japanese integrated steel makers are enhancing the production cut but the output reduction can’t catch up with the demand recession. A coil center source said product arrivals from makers are widely decreasing but the inventories don’t decrease. Ministry of Economy, Trade & Industry points out the decent level of Japanese steel sheet inventory is around 3.7 million tonnes. Slow demand is likely to prolong the inventory adjustment.