JFE Steel Reduces H-Beam Supply for Distributors

JFE Steel decided to reduce the H-beam shipment by more than 10% for distributors in May and June from April level. The firm reduces the supply depending on market condition for each area when the firm accepts the order next week. The firm tries to improve the supply balance through the additional production cut under very slow demand in distributors’ market though the firm sees the basic demand keeps firm and the inventory level is normal. The firm planned to keep the shipment level for distributors in April-June as January-March after the firm reduced the shipment by 10% in January-March from October-December to meet lower demand level. The firm expected the same level shipment could improve the supply balance when the demand usually increases in April-June from January-March. However, the firm reduces the shipment additionally to meet the slower market than expected. JFE Steel estimates the domestic H-beam demand increased to more than 4 million tonnes without special item in fiscal 2006 from 3.6 million tonnes in fiscal 2005. The firm expects the demand will be around 3.8 million tonnes and keeps firm despite of the drop from the high level.