By the end of May, carbon steel flats stocks at Japan’s steel producers, coil centers and distributors approximated 3.9 million tonnes, or the highest since September 2020 and second month with an on-month growth, Mysteel Global noted from the data shared by Nippon Steel on July 7, though supply remains tight in general against the demand, and the rises are to be temporary, according to market sources.
The stocks including hot-rolled (HR), cold-rolled (CR) and coated coils and sheets, grew by 6% or 220,000 tonnes on month, according to the Nippon Steel data, and a company official commented that on-month rise in May was partly due to the holidays at the start of that month, as deliveries slowed down around the time.
Over the past three years, Japan’s carbon steel flat stocks at end of May were higher by 120,000 tonnes on month on average, Mysteel Global calculated based on the company’s data.
As of now, “Japanese steel producers have been ramping up output cope with the robust demand from the manufacturers, and some of the stocks in the calculation by the end of May had probably been delivered shortly afterwards, so the rises may not continue,” he added.
Japan’s carbon steel flats stocks by May
| By Ownership | Volume (‘000 tonnes) | M-o-M |
| Producers | 1,814 | +5.5% |
| Coil Center | 1,292 | +5% |
| Distributor | 800 | +9% |
| By product | ||
| HR coils and sheets | 1,864 | +6.2% |
| Coated coils and sheets | 1,158 | +7% |
| CR coils and sheets | 884 | +4.4% |
| Total | 3,905 | +6% |
Source: Nippon Steel
A Tokyo-based flat steel trader agreed, also pointing out that the Japanese buyers more look for more domestic supplies now that imports have been declining.
“They (the Japanese buyers) had been trying to book more from abroad, but overseas producers have cut down on exports to prioritize domestic customers, so Japan’s flat stocks will probably decline in the following months,” he predicted.
Japan imported 85,618 tonnes of HRCs in May, down 12.1% on year and 20.4% lower on month, according to the latest data by the Japan Iron & Steel Federation.
Delivery of carbon steel flats from the domestic producers has been less and taking longer nowadays, according to a distributor in Tokyo, indicating that the supplies are rather tight.
“We cannot receive flat products when we need, and this is boosting the market sentiment and probably lead to further price rises,” he added.
As of July 7, the SS400 grade 1.6mm thick HR cut sheet (1,219×2,438mm) are transacted at Yen 118,000-121,000/t ($1,068-1,103/t) in the spot market in Tokyo, up Yen 16,000/t on month, and SPCC grade CR cut sheet (914×1,829mm) are dealt at Yen 126,000-130,000/t, Yen 10,000/t higher on month, according to market sources.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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