Plate Price to Decline around Tokyo

Steel plate price is decreasing around Tokyo. The market price is 105,000 yen per tonne for standard size and 110,000-120,000 yen per tonne for processed material. The spot plate demand is less than half of June 2008 and the inventory held by the dealers is very high at 3-4 months to the shipment. The industry interests expect the inventory would begin to decrease after October under the unforeseeable demand.

The dealers’ shipment is less than 50% from a year earlier level when the demand for construction and machinery decreased. Particularly, the construction machinery and industrial machine demand is very low level since fall 2008. The order volume of Japanese construction machinery makers decreases by 50-60% for 2009 compared with the same period last year.

The construction demand is also at lower level except the large scale project. Japanese construction starts of condominium decreased by over 60% in April from a year earlier.

The dealers’ plate inventory is very high level under the demand stagnancy. The inventory held by dealers around Tokyo increased by 3.8% to 158,355 tonnes at the end of April from March while the inventory rate increased by 45.9 percentage points to 297.8%, according to Japan Steel Plate Shearing Industrial Guild.

The price plunge stopped in May when the profitability of dealers was impacted by the shrinking of price gap between standard size and processed material. However, the plate makers reduce the price due to the raw material price decline and demand stagnancy including shipbuilding. The transaction price by some dealers is less than purchase price.