JFE Bars & Shapes to Reduce Shape Steel Output by 20% for Oct-Dec

JFE Bars & Shapes plans to reduce the output of angle and channel for dealers by about 20% for October-December from July-September. The firm considered the supply and demand becomes loose due to low demand. Dealers are raising the reselling price but the market price grows stagnant to reflect slow shipment. The firm will support dealers’ price hike by the supply adjustment.

JFE Bars & Shapes takes precedence to the price ahead of the sales volume. The firm apprehends dealers’ inventory might increase when the demand drops for January-March of low demand season.

Dealers completed inventory adjustment of angle and channel in August but the inventory increased again at the end of September. Equal angle inventory at the end of September exceeded 2 months of shipment for the first time in 4 months, according to a dealers’ association in Tokyo.

The market price is 75,000 yen per tonnne for equal angle around Tokyo. Dealers are trying to pass high purchase cost on their reselling price, eyeing 78,000 yen. The market price surged by 4,000 yen per tonne from the bottom in July while hit ceiling in October. Users are resisting dealers’ price hike when ferrous scrap purchasing price by local electric furnace steel makers is decreasing.

JFE Bars & Shapes’ output increased by 10% for July-September from April-June thanks to speculative demand along makers’ price hike. The output would decrease by 10% for October-December from July-September. The firm forecasts order receipt volume would decrease for October-December due to cloudy demand.