Japan H-Beam Stock Drops by 6.6% in August

Japanese H-beam inventory held by dealer members of Tokiwa-kai, which is a group of distributors dealing Nippon Steel’s products, decreased by 6.6% to 192,600 tonnes at end of August from July, according to Nippon Steel. The stock decreased to less than 200,000 tonnes for the first time in 4 months. The stock decreased for 2 months in a row but Nippon Steel still sees the stock is too high for the demand when the stock rate was 2.31 months of the shipment. Nippon Steel tries to improve the inventory balance by keeping production cut in September as July and August.

Nippon Steel keeps the high selling price to discourage the dealers from submitting additional orders. The firm focuses on inventory adjustment until the market condition including price level improves. The firm sees the adjustment takes more time to normal 170,000 tonnes stock for current demand level.

Nippon Steel plans 18 days stoppage at large section mill in Sakai works in September. The firm plans averaged monthly H-beam production in August and September is same level as July. The firm indicates the firm continues the production cut for October to reduce the inventory level.

The firm sees the demand is firm for small warehouses, commercial building and health care facilities while building activity in northern Japan is resumed for rebuilding and new commercial building. However, the firm expects the full scale demand increase could take more time for rebuilding activity in damaged areas by the major earthquake.

The dealers’ H-beam arrivals from the makers decreased by 7,700 tonnes to 69,600 tonnes in August from July, which decreased for 5 months in a row. The dealers’ shipment decreased by 3,100 tonnes to 83,300 tonnes but the daily shipment decreased by only 100 tonnes to 4,200 tonnes.

The dealers’ inventory decreased by 3.8% to 111,200 tonnes in Tokyo, Osaka and Nagoya areas in August from July. The inventory rate was 2.15 months compared with 2.28 months in July. The shipment decreased by 2.8% to 51,800 tonnes. The arrivals decreased by 7.4% to 41,300 tonnes.

The dealers’ inventory decreased by 3.8% to 81,400 tonnes in other 8 areas in August from July. The inventory rate was 2.58 months compared with 2.60 months in July.