Lower Japan Hot, Cold, Coated Steel Stock in February

Japanese inventory of hot, cold and coated steel sheet decreased by 3.4% or 132,000 tonnes to 3.742 million tonnes at the makers, distributors and coil centers at end of February from January, which decreased for the first time in 3 months. The decrease was wider than usual while the demand decreased by averaged around 90,000 tonnes from January to February in past 10 years. However, the inventory is expected to increase in March when the makers and dealers’ inventory increases when some the users of automakers and appliances makers stopped the operations after the major earthquake.

Nippon Steel sees the makers cannot adjust the production to meet unexpected lower demand. The firm increases the output for rebuilding the damage and for support of Sumitomo Metal Industries while the demand decreases for some applications. The firm expects the sheet steel supply balance could be unstable for immediate future despite of the production adjustment by the makers.

The makers’ inventory decreased by 1.0% to 1.779 million tonnes at end of February from January. The inventory decreased by 11.0% to 674,000 tonnes at the distributors and by 2.4% to 1.289 million tonnes at the coil centers. The inventory decreased by 3.6% to 1.928 million tonnes for hot rolled flat steel, by 3.8% to 705,000 tonnes for cold rolled flat steel and by 2.8% to 1.11 million tonnes for coated steel.

The inventory rate increased by 0.13 points to 2.27 months for total inventory in February from January. The inventory rate increased by 0.22 points to 2.72 months for hot rolled flat steel and by 0.14 points to 1.78 months for coated steel while the rate decreased by 0.11 points to 2.23 months for cold rolled flat steel.