Japan H-Beam Dealers’ Stock Hits 22-Year Low

Japanese H-beam inventory decreased by 7.2% to 199,600 tonnes held by members of Tokiwa-kai, which is a group of distributors dealing Nippon Steel’s products, at end of February from January, according to Nippon Steel. The stock decreased to less than 200,000 tonnes for the first time in 22 years and 4 months. Nippon Steel sees the dealers’ higher shipment contributed to the lower inventory along with low level arrivals from the makers.

Nippon Steel, however, keeps the production cut, which represents 70% less than normal level, and rejects excess order from distributors when the firm expects the domestic demand slump will continues.

Nippon Steel recognizes some speculative demand for the products when the price is expected to increase partly due to total 8,000 yen per tonne of price hike by Nippon Steel in February and March. The firm expects the higher dealers’ shipment is temporary due to the inventory building demand.

Nippon Steel eyes additional ‘wide’ price hike when steel source is tight mainly for export demand and raw materials cost could increase widely. The firm tries to improve the supply balance through major production cut under low level domestic demand.

The national inventory was 2.13 months for the shipment at end of February, which was lower than 2.51 months in January while the inventory rate is only 1.33 months in Osaka. Nippon Steel sees the inventory level is getting toward normal level.

The inventory decreased by 9.9% to 113,700 tonnes in total of Tokyo, Osaka and Nagoya at end of February from January. The shipment increased by 15.7% while the arrivals from the makers increased by 16.8%. The inventory rate decreased to 1.84 months from 2.36 months in January.

The inventory decreased by 3.5% to 85,900 tonnes in other 8 areas including Sapporo, Tohoku, Niigata, Toyama, Shizuoka, Shikoku, Chugoku and Kyushu at end of February from January. The inventory rate decreased to 2.71 months from 2.76 months in January.