Japan H-Beam Stock Drops by 5.6% in March

Japanese H-beam inventory held by distributors belong to Tokiwa-kai, which is group of distributors dealing Nippon Steel’s H-beam, decreased by 5.6% to 220,800 tonnes at end of March from February, according to Nippon Steel. The stock decreased for 4 months in a row. Nippon Steel sees the makers’ major production cut contributed to the inventory adjustment despite of low level demand. The inventory rate for the shipment decreased by 0.24 points to 2.63 months. However, the inventory adjustment is middle of the process even with improvement of the demand in April-June when Nippon Steel sees the normal stock level is around 2 months.

Nippon Steel tries to reduce the inventory more under the slow demand by limiting the order receipt from the dealers for April order while the firm left the selling price unchanged. The firm’s H-beam production increases slightly in April from March after the firm restarted the production for dealers in March.

The inventory decreased by 1.5% to 106,300 tonnes in Tokyo, Osaka and Nagoya at end March from February. The dealers’ shipment increased by 0.9% but the volume was as low as 46,371 tonnes. The arrivals to the dealers from makers increased by 45.1% but the volume was 44,765 tonnes and less than the shipment when the makers reduced the order receipt from the dealers. The inventory rate decreased by 0.05 points to 2.30 months.

The inventory in Tokyo, Osaka and Nagoya decreased by around 20% from the peak in November 2008 to March 2009. Nippon Steel stopped the order receipt from the dealers for 4 months in a row and stopped the production for the dealers to reduce the inventory. Other makers also reduced the supply for the dealers. However, the dealers’ shipment in the major 3 areas decreased by around 40% in March from a year earlier level. Under the slower demand, the inventory adjustment delayed while the makers and dealers expected the adjustment would finish by March.