Nisshin Steel Cuts Ni Stainless Output by 40% in August, September

Nisshin Steel reduces the nickel series stainless output by 40% for steel making and by 30% for cold rolling at Shunan works in August and September compared with July. The firm cuts the order receipt of cold rolled sheet from distributors by 40-50% since April under domestic oversupply condition and the firm rejected the all of order since June. However, the firm decided the steel making output reduction for the first time since July-September 2005 to reduce the distributors’ inventory. The distributors’ inventory of nickel series cold sheet increased by 4.4% to 68,403 tonnes at the end of July from June, according to the association. The inventory increased for 8 months in a row and the inventory rate for the sales reached record 2.55 months. The buyers are reluctant to buy now when they expect the stainless price would decrease to reflect lower nickel ingot price. Nisshin Steel said the firm didn’t get any order from distributors for the month. The firm is expected to reduce the selling price significantly for September to reflect the nickel price under the surcharge mechanism. The firm tries to reduce the output for early adjustment of the overstock. Japanese largest stainless maker of Nippon Steel & Sumikin Stainless Steel (NSSC) also reduces the output. With output reduction by the major 2 makers, the domestic supply could get tighter in October.