H-beam Market Price Keeps Flat at 73,000 y/t, Tokyo

H-beam market price stays flat at 73,000 yen per tonne around Tokyo. Dealers are facing difficulty in price hike though electric furnace steel makers raised the selling price by 3,000 yen. The market price is expected to maintain current level due to low orders from the users.

Regional demand for steel frame is estimated to have increased by 35.5% to 362,000 tonnes for April-June from the corresponding period of 2009 around Tokyo. Especially the demand increased by 44.2% to 192,000 tonnes in Tokyo and Kanagawa Prefectures thanks to large-scale redevelopment projects and business investment by major manufacturers.

H-beam inventory held by members of Tokiwa-kai, which is a group of distributors dealing Nippon Steel’s products, decreased by 1.1% to 44,100 tonnes at the end of July from a month ago. The inventory decreased for the first time in 4 months thanks to the makers’ output reduction. At the same time, dealers have reduced the inventory with expectations for unforeseeable price and weak demand.

Dealers’ reselling price is relatively high for integrated steel makers’ products compared with the market price. Integrated steels’ products represent more than 50% of the market. However, the current market price is based on electric furnace steel makers’ price. Tokyo Steel Manufacturing’s selling price is 72,000 yen for dealers, almost the same level as the market price. Dealers are suffered from loss making sales.

One dealer said they aim to raise the reselling price to 75,000 yen at least. However, the price hike seems actually difficult because users’ orders maintain slow.