Slow Japan Building Activity Suffers Steel Supply Chain

New building standard law damages steel distributors and processors heavily. Some distributors around Tokyo said the shipment was worst in August and September in past 10 years. Some trading firms secure new yard to accept steel products from makers. Steel structural fabricators’ cash flow is squeezed due to delay of the building process, which could result in financial squeeze for the supply chain. Some makers’ products stock yard has no additional space when the buyers don’t accept the products as planned. General contractors stop new steel order for suppliers but the supply side has overstock problem. Some distributors secure additional stock yard to keep the materials. Steel distributors are getting cautious for credit for steel structural fabricators when the fabricators are suffered from very slow building activity. The distributors could reduce the credit facility preparing for potential default. The fabricators industry, which is overcompetition for long term, is expected to experience another major bankruptcy period.