Plate Price Drops by 5,000-6,000 yen/t in Tokyo

Plate steel market price decreased by 5,000-6,000 in the month to 120,000 yen per tonne for standard size with 19 millimeters thick, 5 feet width and 10 feet length around Tokyo. The distributors try to liquidate the overstock at lower price in late January when the inventory increases due to sharply slowing demand for building, civil works and machinery. The price is likely to decrease more due to uncertain market condition.

The market price reached around 125,000 yen per tonne in early December after the distributors’ effort to pass makers’ additional price hike. However, the dealers’ sales volume decreased widely in December. The standard size plate sales decreased by 41.7% from a year earlier while the inventory increased by 16.3%, according to Tokyo Steel Product Dealers Association.

The demand decreases when construction machinery makers’ production decreases sharply since autumn under global recession while the mid- and small-sized building demand keeps slow. Some major building projects are postponed or canceled reducing the demand volume. The demand level is estimated to decrease in January from December.

The supply gets easier due to slower construction machinery demand while the supply was very tight until autumn of 2008. The better supply condition contributes to the dealers’ inventory building while the dealers couldn’t build the inventory before due to delivery delay from the makers. The dealers try to reduce the inventory now even at cost of the pricing. The market price could decrease while domestic integrated steel makers’ high price could support the price level.