Tokyo Steel Manufacturing Company, Japan's top electric arc furnace steelmaker will keep product prices unchanged for a fifth straight month in June as labour shortages curbed construction demand.

The company's pricing strategy is closely watched by Asian rivals such as POSCO, Hyundai Steel Company and Baosteel which aim to boost exports to Japan.

Mr Kiyoshi Imamura MD of Tokyo Steel said that "Inventory level has peaked and it is on the decline. But because of a shortage of workers, some construction projects have been delayed, and steel demand is still on the road to recovery. Prices for its main product H-shaped beams, which are used in construction, will stay flat at JPY 80,000 per tonne in June.

Mr Imamura said said that "But the overall picture is improving as stockpiles have peaked in March or April and many redevelopment projects in Tokyo and regional cities are expected to launch in and after July."

A spokeswoman at Japan's largest steelmaker said that inventories of H-beam steel at Nippon Steel & Sumitomo Metal Corporation's distribution channels fell about 2% in April from the previous month to 228,500 tonnes, the first decline in 6 months.

She said that “Nippon Steel's H-beam stock level is closely watched by the local industry as a gauge of demand for construction-related steels. We expect the stockpiles to keep falling through the next couple of months."