Japan Steels Inventory Adjusted to the Moderate Level in June

The Japan Iron and Steel Federation (JISF) held a regular meeting in Osaka on Tuesday to discuss current steel supply and demand conditions and forecasts, which is held every quarter in Tokyo, Osaka and Nagoya. Kenzo Okubo, vice chairman of JISF’s domestic market research committee, who is director and executive vice president of Sumitomo Corporation, said at the meeting that domestic steel inventory is steadily decreasing in Japan and might become to the moderate level at the end of June.Mr. Okubo explained domestic inventory of ordinary steels continues decreasing in Japan after the peak at the end of September 2005, which was increasing despite of firm domestic demand before September 2005. He said the inventory expansion was due to the increase of nominal demand and the rapid inflow of ordinary steel imports, especially for coated, hot- and cold-rolled steel sheet. However, he said, the stock level became lower recently in Japan.Mr. Okubo pointed out overseas markets are also firm and steel coil prices are recovering to the level of a year earlier in Europe and the U.S.A. He said that domestic steels shipment would decrease in Japan in April-June 2006 from both January-March 2006 and April-June 2005 but that export could increase from January-March mainly for Japanese manufacturers’ plants in Asian area.He analyzed Japanese steel makers target on inventory reduction in the market according to the makers’ output plan for April-June. Additionally Japanese manufacturing industries seem to maintain active in the period. Under the condition, domestic steel inventory is likely to become to less than 5 million tonnes of the moderate level.