Japanese Steel Makers Reduce Plate Output More for Jul-Sep

Japanese integrated steel makers will reduce plate output more for domestic market during July-September. The demand is expected to get worse from construction machines, industrial machines and steel frames for July-September compared with April-June. Shearing processors’ inventory rate rose to about 3 months for shipment. Dealers’ and users’ inventory rate is high. The demand from shipbuilding is concerned to decrease. Plate makers plan to decrease shearing processors’ inventory to around 300,000 tonnes until September.

Japanese shearing processors’ inventory was 513,000 tonnes at the end of March. Their inventory rate was 2.9 months for shipment of 175,000 tonnes, which was double compared with the decent level of 1.5 months.

The demand is decreasing by 70-80% from construction and industrial machines from a year earlier. The machine makers’ inventory adjustment is expected to continue after July. Consequently, low demand for plate is forecasted to be protracted.

The demand for building materials is unlikely to recover early when private companies’ capital expenditure is reducing for offices, stores, plants and warehouses.

Shipbuilders’ order receipts are decreasing by 80% from last autumn. As for contracted orders, some customers postpone ship acceptance.

Japanese plate output was 813,000 tonnes in April and 731,000 tonnes in May, decreasing by about 30% before March.