Japan Steel Makers Aim to Reduce H-beam Inventory to Less Than 200,000T

Japanese integrated steel makers try to decrease domestic H-beam inventory. H-beam inventory held by the members of Tokiwa-kai, which is a dealers’ association dealing Nippon Steel’s products, represented the high volume of 215,000 tonnes at the end of June. Integrated steels would try to reduce the inventory to below 200,000 tonnes until the end of August. H-beam production may decrease largely for July-September since export contracts are also stagnant due to low exporting market price.

Nippon Steel carries out regular maintenance of productive lines for large-size shape steels in Sakai and Kimitsu iron works for July-August ahead of the original schedule and reduces H-beam output by around 30,000 tonnes per month. The firm may implement additional output reduction at Sakai iron works in September. JFE Steel seems to reduce H-beam output volume in July compared with June. Electric furnace steel makers will also decrease H-beam production due to scheduled refinement and electricity saving during the summer.

H-beam demand from construction market maintains low level after long holidays in early May. Tkiwa-kai members’ inventory increased for 6 straight months. The inventory rate worsened to 2.73 months of shipment at the end of June, much higher than the so-called moderate level at 2 months. Some concerned people suggest the actual decent level is estimated at 180,000 tonnes against the current demand size.

Japanese H-beam production increased to 327,000 tonnes in May from 322,000 tonnes in April due to rehabilitation of some steel makers from the disaster. The production decreased by 14.3% to approximately 280,000 tonnes in June from May. The output decreased by 6.9% to 71,000 tonnes at Nippon Steel and decreased by 18.1% to 67,000 tonnes at Tokyo Steel Manufacturing. The production also halved at Fukuyama area of JFE Steel’s West Japan iron works.