Japan H-Beam Inventory Increases in October

Nippon Steel announced on Tuesday Japanese distributors’ H-beam inventory held by Tokiwa-kai, which is a group of dealers dealing Nippon Steel’s products, increased by 4.3% to 272,500 tonnes at the end of October from a month ago, which represented year-to-year increase for 4 consecutive months. The inventory exceeded 270,000 tonnes for the first time since December 2007. The inventory to shipment rate rose to 2.48 months from 2.36 months. Nippon Steel explained dealers’ shipment turned stagnant significantly when ferrous scrap price dropped rapidly and electric furnace common steel makers decreased the selling price.

H-beam inventory increased by 4.9% to 136,100 tonnes at the end of October from a year ago around Tokyo, Osaka and Nagoya, and increased by 3.8% to 136,400 tonnes in other areas. Especially the inventory increased by 16.2% around Shizuoka and by 9% around Tokyo.

The firm said actual demand keeps a certain volume but the firm reduces the output and skips accepting orders to improve the supply and demand balance when users’ order volume and dealers’ shipping keeps low.

Nippon Steel skips H-beam order reception from dealers in November. This is the second order skipping since May 2007. The firm reduces H-beam output by above 80% in November from a year earlier as well when dealers’ inventory is increasing. The firm has reduced the output by 20-40% for recent several months from a year earlier. The firm sets H-beam selling price unchanged for November orders.