Japan Steel Sheet Inventory Hits 30-Month High

Japanese steel sheet inventory held by the makers, dealers and members of Japan Coil Center Association, increased by 3.9% or 163,000 tonnes to 4.345 million tonnes at the end of August from July. The stock increased to more than 4.3 million tonnes for the first time after 4.514 million tonnes in February 2009.

The domestic demand is increasing for automobile, construction machinery and construction. However, the inventory was 2.51 months of the shipment in August, which is much larger than normal 2 months. The industry sources recognize the inventory is warning level.

Nippon Steel expects Japanese sheet steel industry needs to realize normal inventory level as early as possible under uncertain economy condition in USA and Europe, historical yen rate and capacity expansion in China and South Korea. The firm sees the key is Japanese makers’ production adjustment to meet actual demand.

The steel sheet inventory held by the makers increased by 4.6% to 2.039 million tonnes at the end of August from July, which increased to more than 2 million tonnes for the first time since September 2005. The sheet steel inventory increased by 7.2% to 879,000 tonnes for the dealers and by 1.1% to 1.427 million tonnes for Japan Coil Center Association members.

The total sheet inventory increased by 4.2% to 2.262 million tonnes for hot rolled flat steel at the end of August from July. The stock increased by 2.6% to 839,000 tonnes for cold rolled flat steel and by 4.2% to 1.244 million tonnes for coated steel. The inventory rate increased by 0.14 point to 3.04 months for hot rolled flat steel. The rate increased by 0.09 point to 2.60 months for cold rolled flat steel and by 0.08 point to 1.88 months for coated steel.