Stock Adjustment of Steel Sheet Pauses in Japan

The stock of 3 kinds of steel sheets for domestic use in Japan increased by 4.2% to 4.437 million tonnes at the end of January from a month ago at makers, wholesalers and coil centers belonging to National Steel Coil Centers Association. The stock increased for the first time in these 5 months and the stock adjustment appears to be pausing beyond expectation. The stock increased by 11% from the same month of 2005, which is almost the same level of that in December 2005. The stock increased at wholesalers, coil centers and especially makers in January from the previous month. In particular, though the stock at coil centers decreased through the end of last year, that increased again and was still in the high level. Makers’ inventory seemed to increase due to the repair of blast furnaces and advanced production before the equipment construction. Additionally the stock tends to increase every January after New Year holidays. This winter’s heavy snowfalls also impacted on the stock in terms of decline of the shipment. According to some blast furnace steel maker, it will have wait-and-see stance as the demand level and stock adjustment trend are not changed under the stock increase. The stock increased by 7.3% to 1.874 million tonnes at makers at the end of January from a month ago, by 1% to 909,000 tonnes at wholesalers and by 2.7% to 1.654 million tonnes at coil centers. The stock of hot-rolled steel sheet increased by 6.2% to 2.393 million tones, cold-rolled sheet by 1% to 803,000 tonnes and surface-treated sheet by 2.6% to 1.241 million tonnes.