H-Beam Price Hits 25-Year High in Tokyo

H-beam market price increased by 1,000 yen to 80,000 yen per tonne for base size with 200 by 100 millimeters width around Tokyo last week hitting 25-year high. The distributors try to pass markers’ hike though the increase pace could slow down due to slower demand. However, the strong pressure by makers and distributors could keep the increase tone for the market. Nippon Steel apparently reduced the order receipt by 10-20% from distributors around Tokyo for September order. The firm tries to reduce the dealers’ inventory through the flexible order cut depending on the condition. The dealers’ shipment could decrease in September from August due to slow demand partly caused by renewal of building standard law. However, the dealers expect the demand should recover soon and focus on price increase effort to secure profitability with high priced materials. H-beam market price is also reached 80,000 yen per tonne around Osaka for the first time in 27 years when the dealers try to pass the higher cost price after the makers increased the selling price to cover higher ferrous scrap and other raw materials cost. The supply balance improved from former oversupply despite of slow demand around Osaka. The makers try to reduce output and the dealers reduce the inventory for better supply condition. A dealer source said the dealers’ inventory decreased for some sizes and the better supply balance could support the higher price. The dealers around Osaka try to improve the profitability by taking the chance under the better supply condition. The dealers expect the market price could exceed 80,000 yen per tonne level.