Nippon Steel Cuts H-beam Order by 40% with Increasing Inventory

Nippon Steel announced on Tuesday H-beam inventory held by members of Tokiwa-kai, which is a group of distributors dealing Nippon Steel’s H-beam, increased by 2.9% to 242,900 tonnes at end of July from a month ago. The inventory increased for 3 straight months. The inventory was 1.87 months of shipment at the end of July, which was 1.95 months a month earlier.Nippon Steel explained H-beam inventory increased when dealers’ shipment maintained slow with less demand while makers’ supply was higher than the market. The firm expects market stagnancy would continue when the actual demand is weakening from mid- and small-sized building constructions.Based on the situation, Nippon Steel announced on Tuesday the firm reduces H-beam order receipt from distributors by more than 40% for August contracts compared with the ordinary level. The firm reduced order receipt by more than 20% for July contracts. The firm aims to improve the supply and demand balance by the additional order cut. Nippon Steel also announced the firm sets H-beam selling price unchanged for August contracts from July contracts. The firm kept the price unchanged for the first time in late 2 months. The firm said the market inventory was at the moderate level at the end of July. However, the firm decided the additional order cut for August with concerns that H-beam inventory might continue increasing with weaker demand.