Japan Steel Demand to Rise by 5.2% in July-September, METI

Japanese demand of steel products will increase by 5.2% to 26.97 million tonnes in July-September from same period of 2005, announced by Ministry of Economy, Trade and Industry. The demand is 1.8% higher than April-June. The steel shipment demand in raw steel will decrease by 0.7% to 28.78 million tonnes from April-June for the first time in 4 quarters though the demand increases by 3.4% from same period of 2005. The domestic demand will increase in July-September from April-June with firm demand for manufacturing and building and civil works though the automotive demand will decrease slightly. The export demand increases for offshore partners along with favorable market price. However, the raw steel demand, which is expected to be third record, will decrease after the sheet and steel products inventory increased at the end of May. METI sees domestic steel makers should keep cautious for the production to reduce the inventory under firm demand. The steel products demand increases in July-September for the first time in 2 quarters in quarter to quarter and for the first time in 5 quarters in year to year. The raw stele demand increases for 3 quarters in a row in year to year. METI warns the steel industry should keep watching domestic inventory, Chinese higher output and export and inventory increase in USA though METI expects the steel demand keeps high-level at home and abroad in July-September. METI said domestic makers should try to meet actual demand and not to build inventory under strong demand. METI expects the steel inventory held by makers and distributors will decrease to 6.2 million tonnes at the end of September compared with estimated 6.33 million tonnes with 95% for the shipment at the end of June. METI estimates automobile output will keep the high level in fiscal 2006 as 10.9 million units in fiscal 2005. METI expects the carbon steel demand will increase by 5.4% in July-September from April-June for construction including 10.2% up for civil works and 4% up for building. The construction demand will increase by 0.1% from same period of 2005 including 4.8% drop for civil works and 1.7% up for building. METI expects the carbon steel demand for manufacturers will increase by 0.4% from April-June including 1.8% up for shipbuilding, 1.5% down for automobile, 2.9% up for industrial machinery and 1.8% up for appliances. The manufacturers demand will increase by 2.3% from same period of 2005 including 4.6% up for shipbuilding, 1.9% up for automobile, 3.7% up for industrial machinery and 1.7% up for appliances.