Japanese imported flats stockpiles up 8.2% in June
Japanese imported flat rolled steel stockpiles rose by 8.2% at the end of June, marking the first rise in three months.
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Stockpiles at Japanese ports increased by 12,000 tonnes from the previous month to 158,000 tonnes, according to figures compiled by major trading firm Hanwa Co.
They are now at their highest level since January.
The rise in stockpiles has been largely attributed to regional mills taking advantage of the rise in the value of the Japanese currency to boost their exports combined with low take-up levels amid sluggish domestic demand.
The build-up in stockpiles of imported steel will not be welcome by domestic steel producers, who are facing their own rising inventories, as it will add to the severe pressure already in place on prices.
Tokyo Steel, for example, earlier this week announced that it would increase its August prices on only a very select number of flat products, including a ¥2,000 ($25) per tonne increase for pickled & oil cut sheet, and a ¥1,000 per tonne hike for P&O coil, hot cut sheet and checker plate.
However, the company said the hike was due to overly aggressive price cuts in the previous month, and is not the result of any underlying rebound in prices.
Moreover, the company was forced to leave prices for key products such as H-beam, hot rolled coil and rebar unchanged at multi-month lows, a move that has already been copied by fellow electric arc furnace operator Yamato Steel.
With major producers in the region such as Baosteel, Wuhan Steel and Anshan Steel announcing further cuts in their August prices and the yen showing no signs of retreating, the pressure from cheap imports is likely to remain in place, market watchers say.