Higher Yen Rate Damages Japan Steel Industry

Japanese dealers’ H-beam inventory decreased by 9.7% to 165,200 tonnes at member companies of Tokiwakai, which is group of distributors dealing Nippon Steel’s products, at end of September from August, according to Nippon Steel. With the decreases for 3 months in a row, the stock decreased to less than 170,000 tonnes for the first time since November 1973. The inventory rate was 1.84 months of the shipment while the industry sees 2 months of inventory rate is normal. Nippon Steel sees the stock level is extremely low but the firm keeps the production cut at more than 70% lower than normal level under slow demand.

Nippon Steel sees H-beam market shows sign to recover when the supply balance gets normal with reduced stock while the demand hit bottom with higher building start for nonresidential building and higher H-beam order for small sized buildings. However, Nippon Steel keeps major production cut to minimize the supply. The firm tries to keep the supply balance when the firm expects the demand couldn’t increase widely.

The dealers’ shipment kept more than 80,000 tonnes in September and the daily shipment hit more than 400 tonnes for 2 months in a row. The arrivals from the makers to the dealers increased to 72,000 tonnes, which increased for the first time in 5 months, but the level was still lower than the shipment.

The stock decreased by 11.5% to 93,300 tonnes at Tokyo, Osaka and Nagoya in September from August. The shipment decreased by 3.1% to 52,900 tonnes while the arrivals increased by 6.2% to 40,800 tonnes. The inventory rate decreased to 1.76 months from 1.93 months in August.

The stock decreased by 7.3% to 71,900 tonnes in other 8 areas including Sapporo, Tohoku, Niigata, Toyama, Shizuoka, Shikoku, Chugoku and Kyushu in September from August. The inventory rate decreased to 1.94 months from 2.29 months in August.