Japan Brass Bar Output Below 12,000t in January, 34% Y/Y Low

Japanese brass bar makers’ production seemed to be below 12,000 tonnes in January, lower by 34% from a year earlier and by 19% from the December 2008, according to the source. Brass bar production may decrease more and approach 10,000 tonnes per month during February-March, when automakers and electric appliance makers continue severe inventory adjustment.

Japanese brass bar makers’ output continued decreasing by more than 1,200 tonnes every month from 17,343 tonnes in October 2008. The output represented 2-digit year-on-year decline for 5 months in a row since September 2008. The minus range was 11% in September, 14% in October, 19% in November, 22% in December and 34% in January.

Japanese brass bar makers, including large makers whose production is more than 2,000 tonnes per month, has implemented output reductions. Some of large makers seem to be more than halving their production. The demand worsened especially from automobiles. Major automakers’ inventory adjustment is likely to continue until April 2009. Brass bar demand is also weak from construction related applications such as gas appliances, water heaters and water taps.

Brass bar wholesalers and consumers are expected to minimize their stocks toward the end of March 2009, the end of a fiscal year for most Japanese companies. They may decrease brass bar purchasing more.