Japan Steel Sheet Inventory Shows First Decrease in 5 Months

Japanese steel sheet inventory held by steel makers, distributors and coil centers for domestic shipment decreased by 0.8% or 33,000 tonnes to 4.181 million tonnes at the end of July from a month ago. The inventory decreased for the first time in 5 months. The demand seems to have upturned from automobile and construction industries. However, in usual years, the inventory tends to increase by around 200,000 tonnes at the end of August mainly due to summer holidays at steel makers and steel sheet users. Several steel maker sources regard the inventory still maintains higher than the decent level.

An official of Nippon Steel said steel sheet shipment is expected to increase when automobile production continues to recover for August-October and the demand shows an improving sign for constructions and renovations. The official person said steel makers should keep cautious output control in balance with the actual demand. The official also pointed out strong yen rate might delay domestic inventory adjustment since steel sheet import could increase.

Steel sheet inventory increased by 1.4% to 1.949 million tonnes at steel makers while decreased by 3.8% to 820,000 tonnes at distributors and by 1.8% to 1.412 million tonnes at coil centers. By items, the inventory decreased by 1.5% to 2.171 million tonnes for hot rolled steel sheet and by 1.5% to 1.193 million tonnes for surface treated steel sheet while increased by 1.6% to 818,000 tonnes for cold rolled steel sheet.

The total inventory ratio to shipment slightly worsened by 0.03 points to 2.45 months. By items, the inventory to shipment worsened by 0.29 points to 3.03 months for hot rolled steel sheet, by 0.03 points to 2.55 months for cold rolled steel sheet while improved by 0.17 points to 1.79 months for surface treated steel sheet. The inventory ratio improved only for surface treated steel sheet since the shipment increased for car industry.