Japan Cemented Carbide Output Levels Off in 2006

Japanese cemented carbide tool shipment increased by 11.8% to 328.278 billion yen in 2006 from 2005 while the cemented carbide production kept as flat as 6,268 tonnes, according to survey of 43 members of Japan Cemented Carbide Tool Manufacturers’ Association (JCTMA). The growth rate became slower after July 2006 for both tool shipment and cemented carbide production when domestic automobile industry postponed their new investment, which is the largest user of cemented carbide tools. The peaked demand seemed to level off for both tool shipment and cemented carbide output.Japanese cemented carbide tool shipment has hit record for 3 straight years. The cemented carbide output leveled off at the record in 2005.However, the shipment increase reflected not only the demand growth but the number increase of JCTMA members and the influence of members’ price hike to pass tungsten price upsurge, the main material for cemented carbide tool. By exception of new 3 members, the annual shipment increased by 7.5% in 2006 from 2005. The yearly growth rate kept over 10% for 2003-2005 but became lower in 2006.Cemented carbide output volume reflected the peak out more clearly. The monthly growth rate had shown year-to-year minus since July 2006, even though the annual output leveled off. Secretary general of JCTMA said cemented carbide makers seemed to refrain from increasing their inventory with expectation cemented carbide tool demand weakens.After July 2006 Japanese cemented carbide tool shipment was supported by active export. However, the export value increased by only 2.9% in October-December 2006 from the same period of 2005 and showed sign to peak out.