Nippon Steel Sees Firm Japan H-Beam Demand in F2007

Japanese H-beam domestic demand will decrease by 100,000 tonnes to 3.9 million tonnes in fiscal 2007 starting April from fiscal 2006, according to Nippon steel. The firm expects the actual demand keeps firm for fiscal 2007 as fiscal 2006, when the demand increased to 4 million tonnes from 3.6 million tonnes in fiscal 2005. Nippon Steel tries to keep the normal supply balance through the lower supply when the firm considers additional hike to follow market move with higher international price and higher ferrous source cost. Nippon Steel expects the domestic demand will be 1 million tonnes in April-June, which is 50,000 tonnes higher than January-March and same period of 2006. The estimated quarterly demand will be 1 million tonnes both in July-September and October-December and 900,000 tonnes in January-March 2008 compared with 1 million tonnes in July-September 2006, 1.1 million tonnes in October-December 2006 and 950,000 tonnes in January-March 2007. The firm analyzes the demand was delay to shift around 100,000 tonnes from fiscal 2005 to fiscal 2006 due to slower building construction authorization after fabrication scandal of structural calculation. The firm estimates the actual demand was 3.7 million tonnes for fiscal 2005 and 3.9 million tonnes for fiscal 2006. The firm keeps lower supply through 20% rejection of distributors’ order for better supply balance though the distributors’ inventory keeps normal level. The firm is likely to keep the selling price this month when distributors cannot pass the higher cost price after Nippon Steel’s 3,000 yen per tonne hike for March order. However, the firm would follow the market to increase the price again when electric furnace steel makers should raise the price to cover higher ferrous scrap cost.