JFE Steel Keeps Low Level H-Beam Supply for Dealers

JFE Steel will keep the H-beam supply for distributors in October-December at 20% lower level from October-December 2005. The firm has reduced the output and order from distributors by around 20% since March 2006 compared with October-December 2005 to reduce distributors’ overstock. Distributors’ stock held by Tokiwa-kai members, which is indicator for the H-beam market price, decreased for 4 months in a row through July. However, JFE Steel decided to keep reducing the supply when the stock is still higher than normal level. Tokiwa-kai reported the inventory was 278,000 tonnes and 1.87 months of shipment at the end of July. The inventory is expected to be same level at the end of August due to fewer operation days. The demand is firm especially for major building applications. JFE Steel plans to produce same volume of H-beam including shipment for distributors and for users in October-December as same period of 2005. The output is 15% higher than July-September 2006. JFE Steel expects the domestic demand is 3.65 million tonnes for the year to March 2007, which is slightly higher than previous year. The firm expects the demand is 1.8 million tonnes for half year to March 2007 compared with 1.85 million tonnes for half year to September 2006.