By the end of February, stocks of carbon steel flat products held by Japan’s steel producers, coil centers and distributors approximated 4.65 million tonnes, mostly unchanged on month, according to the data released by Nippon Steel on April 6. Market sources observed that Japan’s stocks had been hovering high as the steel consumption by the domestic auto sector remained slow.
Japan’s stocks with hot-rolled (HR), cold-rolled (CR) and coated coils and sheets were also 31% higher on year, Mysteel Global calculated based on the data.
A Tokyo-based flat steel trader explained that February stocks usually decline on month due to more business days compared with January. “But actual stocks might have increased on month as the steel consumption by the domestic auto sector was much slower than expected,” he added.
A sales official from an integrated mill in Tokyo observed that flat steel producers had seen their stocks accumulate so that they had to lower their flat output.
“The flat steel consumption by other sectors is firm and that by the construction sector is expected to improve. So we expect flat stocks to decline when Japanese automakers will be able to ramp up output,” he predicted.
Japan produced approximately 9.98 million tonnes of HRC, CRC and galvanized sheets in total over January-February, down 6.4% on year, Mysteel Global calculated based on the latest data from Japan Iron & Steel Federation.
The sales official added that if Japan’s steel imports stay low, it will contribute to the decline in domestic flat stocks, and he expected that Japanese buyers won’t need to rely on imported materials for coming months given their sufficient stocks at hand.
Japan imported some 227,423 tonnes of HRC, CRC and galvanized sheets in February, down 12.5% on year, according to the latest data from Trade Statistics of Japan.
“But uncertainty remains amid the ongoing Russia-Ukraine conflict — it may not only affect Japanese steel consumers, but also steelmakers. So we need to monitor the movement very cautiously,” the sales official warned.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply