Japan Plate Shearing Processors’ Inventory Adjustment to Take Months

Japanese plate steel inventory adjustment by shearing processors would complete after October when slow demand for machinery and construction industry could take more months. The plate inventory is expected to decrease to about 450,000 tonnes until the end of September, which is as same as in fall 2008. However, the normal stock level is estimated to be around 300,000 tonnes under the current demand level when the processors’ shipment is around 200,000 tonnes per month and could decrease more.

The plate inventory increased to more than 500,000 tonnes at the end of January from about 450,000 tonnes until the end of October 2008, according to Japan Steel Plate Shearing Industrial Guild. The inventory increased by 23.3% to 550,202 tonnes at the end of April from a year earlier, which was as high as in April 1998. The inventory rate was 294.5% at the end of April 2009.

The shearing processors only reduce the plate purchase to cut the inventory while integrated steel makers concern about the inventory increase at processors. The shearing processors, which mainly ships for machine usage, stop the new purchase from the makers except for stock out sizes. An integrated steel source said the makers should focus on inventory adjustment at shearing processors and the price support.