TEX reported that Japan's Tokiwakai group of domestic steel distributors held in stock a total of 149,200 tonnes of H beams across the nation at the end of November 2010, down by 10,300 tonnes or 6.5% MoM from a month ago, when the nationwide H beam inventory ratios averaged 1.5%, down from 1.8% in the month before. The Tokiwakai group is concerned with domestic sales of steel products from the nation's largest integrated steelmaker.

As a result, Tokiwakai's H beam stocks decreased for five consecutive months. At the same time, the average H beam inventory ratio stood at a low level for the first time since March 2008.

According to Nippon Steel Corporation, a reduction in the group's H beam stocks stemmed from two factors. In the first place, H beam production from steel mills stood at a continued low level. In the next place, there was an upswing of H beam demand, mainly in deals for small lots.

In the breakdown by main trading areas, Tokyo accounted for 35,000 tonnes, down by 1,200 tonnes or 3.3% MoM; Osaka 31,500 tonnes, down by 5,400 tonnes or 14.6% MoM and Nagoya 17,300 tonnes, down by 1,400 tonnes or 7.5% MoM.

On its part, Nippon Steel is contemplating taking a continued tough stance on H beam order intakes to maintain the current supply demand environment, assuming that the intakes in December compare with those in the month before. Also, the company is poised to further reduce its H beam production.

(Sourced from TEX Report Limited)