JFE Bars & Shapes Plans Additional Output Reduction

JFE Bars & Shapes Corporation will reduce the output by more than 40% for H-beam and by 50% for concrete reinforcing steel bar in January-March from same period of 2007 compared with original plan of 30-40% for H-beam and rebar. The firm keeps the plan to reduce angle and channel output by 30%. The firm tries to improve the supply balance including distributors’ inventory under very slow building activity. The firm keeps reducing the order receipt by 50% from normal level. The firm reduced the angle and channel sales volume by around 20% in October-December from July-September. The firm expects the sales volume in January-March is in line with October-December level. The firm decided the additional output reduction for rebar and H-beam when the firm sees the demand is more depressing. The firm expects the construction materials market keeps very slow when developers revise the construction plan for suburban condominium. The firm eyes additional price hike for the products to cover higher cost for ferrous scrap, ferroalloy and freight after the firm increased the price by 5,000 yen per tonne for equal angle and channel and by 8,000 yen for unequal angle for February shipment. Building starts gets normalize recently. However, the building starts application is still very slow level. The firm tries to improve the supply balance by reducing the output radically.