Protracted Japan Sheet Steel Stock Adjustment

Adjustment of steel sheet inventory seems to take more time in Japan. Japanese hot, cold and coated sheet steel inventory hit the yearly highest 4.41 million tonnes at the end of September, which is held by makers, distributors and coil centers for domestic shipment. The stock might continue increasing when manufacturing industries such as automobile, electric appliance or machine tool makers are in lower activities. Japanese integrated steel makers announced they reduce crude steel output by total 2 million tonnes for a half year to March 2009 but they may be forced additional output reduction.

A coil center source said the firm’s shipment is getting worse after October. Component makers or steel sheet pressing makers are decreasing the order volume to coil centers or large dealers when these users are adjusting inventories due to credit shrinkage.

Japanese steel sheet import is decreasing in volume after July but imported flat steel inventory at quays around Tokyo and Osaka reached 200,000 tonnes at the end of July, 208,000 tonnes at end of August and 21,7000 tonnes at end of September when dealers and coil centers’ shipment keeps slow, according to Hanwa, Japanese major dealer.

Steel makers’ shipment is decreasing when automobile output loses steam. Steel makers’ export contracts are also stopped.