Japan Sheet Steel Stock Drops by 1% in April

Japanese sheet steel inventory of hot rolled, cold rolled and coated steel held by makers, distributors and coil centers decreased by 1.0% or 44,000 tonnes to 4.1 million tonnes for domestic shipment at end of April from March. The inventory decreased for 3 months in a row despite of the small step. The inventory is reaching 4 million tonnes, which the industry recognizes as the benchmark for inventory adjustment. A source from integrated steel sees the inventory keeps decreasing under the firm demand for automobile, appliances and construction materials. Japanese sheet steel import decreased to less than 200,000 tonnes in April for the first time since October 2005. With the lower import, domestic supply is getting tighter along with the output reduction by domestic markers. Nippon Steel checks the orders and rejects some not-urgent orders. Under the improving supply balance, the market players increase the expectation for higher price. The inventory is likely to keep decreasing. However, some sources of trading firms concern speculative purchase could result in potential overstock.