Plate price Drops by 5,000 Yen around Osaka

Cut processed plate steel price decreased by around 5,000 yen to about 125,000-128,000 yen per tonne by this week around Osaka. The dealers reduce the reselling price when the demand is slow except for shipbuilding. The processed material price would decrease more under the economy recession.

The demand for processed material decreased by 60-80% for construction machinery and by 50% for industrial machinery while the construction demand decreased by 20-30% compared with normal level around Osaka. Local dealer’s order backlog is at lower level for 2-3 days and operation rate is 60-80% against capacity. On the other hand, the dealers’ purchase decreased slightly when integrated steel makers’ shipment gets smooth for the dealers and some of plate makers other than integrated steel cut the price to secure the shipment volume. Therefore, the dealers’ inventory is high while some dealers’ stock increases. Averaged inventory rate is a little over 2 months and it seems to take a while for adjustment.

The dealers reduce the price to lower the loss from inventory valuation and to secure shipment volume when integrated steels seem to reduce the price sooner or later. The market price would continue declining while the demand would not recover in the short term.