Japan Steel Demand to Hit 78.6 million tonnes in F2006, Nippon Steel

Nippon Steel revised the domestic steel consumption upward to around 78.6 million tonnes for fiscal 2006 ending March 2007 from 77.2 million tonnes in the previous outlook in April. The firm expects the demand increases by 1.1 million tonnes, which is increases for 4 years in a row, from around 77.5 million tonnes in fiscal 2005. The demand is firm when manufacturers including automobile, shipbuilding and construction machinery increase the activity mainly for export while the residential and non residential building demand keeps firm. However, the demand for manufacturers is vulnerable due to the heavy reliance on export when US steel inventory increases and steel price drops under slowdown of US economy. Nippon Steel tries to keep cautious to potential change in the market at home and abroad while it keeps stable supply for high valued steel products. The firm expects domestic carbon steel products consumption increases by 650,000 tonnes for fiscal 2006 from fiscal 2005 when the demand for manufacturers increases by 700,000 tonnes in fiscal 2006 while construction demand decreases by 50,000 tonnes. The firm expects the special steel products demand will increases by 450,000 tonnes. The firm estimates the housing start is flat at 1.25 million units and non residential building start is also flat at 72.1 million square meters in fiscal 2006 from fiscal 2005 while the civil works will decrease due to lower budget for public works. The firm expects the shipbuilding start will increase to 17.5 million gross ton in fiscal 2006 from 16.5 million gross ton in fiscal 2005. The firm estimates the automobile output will increase to 11.3 million units for finished car and to 7.85 million units for knockdown sets from 10.89 million units and 7.7 million units respectively in fiscal 2005. The firm expects the construction and industrial machinery demand will increases for domestic market due to higher automakers’ capital expenditure while the demand will increase for export under firm demand in Europe and USA, firm mining activity in Brazil and Australia and aggressive investment for infrastructure in China and Southeast Asia. The firm expects domestic steel products consumption will increase by 250,000 tonnes to 20.1 million tonnes in October-December from same period of 2005. The carbon steel demand will increase by 150,000 tonnes to 16.45 million tonnes and the special steel demand will increase by 100,000 tonnes to 3.65 million tonnes.