Stocks of carbon steel hot-rolled, cold-rolled and coated coils and sheets at Japanese steel producers, coil centres and distributors declined by 6.6 % or 263,000 tonnes on the month to some 3.67 million tonnes by the end of September, according to the latest data released by Nippon Steel on November 2. The total, the lowest since the June 2010 record of 3.63 million tonnes, means inventories have fallen for four straight months, Mysteel Global notes.
A Nippon Steel official explained that stocks in September usually decline because September has more business days compared to August when Japan shuts for several days for the Obon summer holidays.
“The decline in stocks is partly from the improvement in demand – especially from automobile-related customers – but also from the efforts of steel producers to trim output to keep market conditions firm,” he added.
End-September flat stocks over the previous five years have only declined by 46,000 tonnes on the month on average, Mysteel Global calculates from the Nippon Steel statistics.
Japan’s flat steel stocks at the end of Sept
A Tokyo-based flat steel trader agreed that improving demand from the Japanese carmakers was the major factor contributing to the overall fall in flat steel stocks. “But slower arrivals of imported flat products was another reason why stocks of these declined in September,” he added.
Japan imported 85,664 tonnes of HRC in September, down 9.4% from August and 21.7% lower on year, according to the latest Japan Iron & Steel Federation data. Similarly, imports of CRC were up 11.2% from August but down 25.9% on year at 50,152 tonnes, while those of galvanized sheet totalled 55,436 tonnes, up 4.5% on month but down 28.5% year.
Meanwhile, Japan’s HRC production in September was down 6.5% on month and off by 16.1% on year at 2.66 million tonnes, while the output of CRC rose by 2.1% from August but tumbled 20.7% from September last year to 1.11 million tonnes. At the same time, galvanized sheet production reached 620,100 tonnes in September, up 2.6% on month but down 26% on the year, as previously reported.
The trader explained that HRC output in September was lower on month but within the total, HRC output for domestic supply was higher to correspond to active domestic vehicle production. “But flat steel output will hover below on-year levels because the demand from other sectors besides auto manufacturing is still sluggish. As a result, overall flat stocks will be kept tight at below 4 million tonnes, which is the level that most market participants believe to be adequate in the current circumstances,” he predicted.
This article has been published under the article exchange agreement between MySteel Global and SteelMint.
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