JFE Steel to Cut H-beam Output Further in July-September

JFE Steel reduces production of H-beam further for July-September. The firm reduced the output by around 10% in April-June from January-March. The output is around 20% lower for July-September than January-March level by advancing maintenance outage earlier than original schedule. The firm reduces the inventory at the dealers when the firm tries to find chance for price hike.

JFE Steel started H-beam output cut since fiscal 2011 ended March 2012. The output in fiscal 2011 was 25% lower than the figure in fiscal 2010. The firm reduced the production further in July-September through major maintenance at the mill in Fukuyama area of West Japan works while the firm originally planned the maintenance for second half of fiscal 2012.

The firm increased selling price of construction steel including H-beam by 5,000 yen per tonne for May order. However, the market didn’t accept the higher price due to overstock at the dealers under slow demand. The firm decided the additional production cut for better supply balance.

Japanese steel demand slows for construction due to delayed rebuilding activity in the major earthquake damaged area. Ministry of Economy, Trade and Industry sees demand of carbon steel products increases by 1.7% to 3.689 million tonnes for building for July-September from April-June. However, Ministry of Land, Infrastructure, Transport and Tourism sees order receipt of shapes is 300,000 tonnes for July or more than 10% lower than April-June level.