H-Beam Price to Hit Bottom in September in Tokyo

H-beam market price could hit bottom in September around Tokyo when the dealers started to avoid low priced transaction despite of the low level demand. The makers try to find the chance to increase the selling price to cover higher ferrous scrap cost. The market watches Tokyo Steel Manufacturing’s price announcement in late August.

The dealers’ inventory was still high as 3.01 months of the shipment as of end July despite of the major supply cut by the makers due to very slow demand. However, the price could hit bottom in around a month when the market expects electric furnace steel makers would increase the selling price under around 30,000 yen per tonne of ferrous scrap cost.

The demand also shows sign to recover. Building certification application, which is advance indicator of building start, was 3,718 in June, which was around 10% lower than a year earlier level, compared with 2,910 in May, which was around 30% lower than a year earlier level. The demand is also expected to increase for civil works under stimulus package.