Japan Cold Stainless Sheet Inventory Continues to Shrink in July

Domestic supply and demand balance is rapidly tightening for cold rolled stainless steel sheet in Japan. Dealers’ inventory was 1.64 months to the shipment in July, according to Japan Stainless Steel Coil Center Association (JSCA). The inventory ratio became much lower than 1.8 months, the level generally said to be balanced. The inventory ratio lowered to 1.43 months for nickel series cold rolled stainless sheet and 1.85 months for chrome series.

JSCA members’ inventory totaled 38,559 tonnes for nickel series cold rolled stainless sheet and 39,506 tonnes for chrome series cold rolled stainless sheet in July. The inventory of nickel series almost halved from the peak at 76,766 tonnes in September 2007. Chrome series inventory decreased by about 30% since the beginning of this year.

JSCA members’ sales totaled 26,891 tonnes for nickel series cold stainless sheet in July, which recovered to 70-80% level compared with the peak at 37,768 tonnes in March 2006. The sales of chrome series cold stainless sheet totaled 21,343 tonnes, which exceeded 20,000 tonnes for 2 months in a row. Dealers’ sales bottomed out.

Some dealers say they cannot minimize inventory anymore. Dealers have intensively progressed inventory adjustment along demand shrinkage. Now dealers are turning to restart orders for stainless sheet makers.

One major dealer said inventory turnover rate is especially high for base sized products and they need to increase order volume to makers. The dealer has recently purchased cold stainless sheet from other dealers. Another concern is that makers are expected to raise the selling price soon. Another dealer source pointed out the import is also tight when the demand is active in overseas markets such as China and South Korea.