Beam Price to Decline More around Tokyo

H-beam market price is weakening from 75,000 yen per tonne for base size around Tokyo. The market sources foresee the current market price is near the bottom when Nippon Steel and Tokyo Steel Manufacturing kept the price. However, both makers and dealers receive a few inquiries. Some transaction price by dealers is around 73,000 yen per tonne, which is as same as Tokyo Steel’s price for project. The market price would steadily decline.

The demand of H-beam decreases not only for small- and medium-sized buildings but also for large sized building projects with more than 10,000 tonnes of steel consumption around Tokyo. The scale of project in progress is shrinking due to the capital expenditure readjustment.

The inventory of H-beam held by distributors dealing Nippon Steel’s product, decreased by 4.2% to 45,440 tonnes at the end of April from March and the inventory rate declined to 2.63 months. The shipment by the dealers increased by 5.5% to 17,352 tonnes in April from a month ago while the purchase increased by 7.0% to 15,309 tonnes.

Inventory adjustment could take more time when the dealers’ shipment in May decreases compared with April and the inventory rate would rise in May while the inventory could decrease somewhat when the purchase by dealers decreases.

Integrated steel maker source foresees less chance of beam demand recovery for April-September. The makers expect some improvement in the second half but the demand could be in line with the first half level.

The dealers started to avoid low price transactions when ferrous scrap price increased since April while some of them sold H-beam at less than 70,000 yen per tonne for direct transaction for users. However, the price would decrease more due to the demand slump.