Japan Carbon Steel Import to Hit 4 Million tonnes Level in 2010

Japanese carbon steel import would increase to 3.7-4 million tonnes in 2010, which is more than 50% higher than 2009 and reaches the level in 2006-2008. The monthly import through July was higher than a year earlier level. The import increased by 74.6% to 2.133 million tonne in January-July from same period of 2009, which represented 85% of 2.495 million tonnes in full year 2009. The import could increase toward second half of the year when yen rate increases rapidly against US dollar. The higher supply capacity in China and South Korea could contribute to Japanese higher import.

Japanese carbon steel import was low level in first half of 2009 due to very slow domestic steel demand after Lehman shock. The import recovered normal level when domestic demand recovered.

Yen rate increased to 15-year high level when the rate reached 84 yen per US dollar temporarily. Offshore steel makers have more chance to increase the export to relative high priced Japanese market.

Steel makers in China and South Korea are aggressive for export when their domestic demand slows down. A trading firm source expects steel makers in China and South Korea could increase the export to Japan with large domestic consumption in Asia.

A coil center official said major Japanese importer tries to secure Chinese import materials while other sheet steel dealer official said South Korean steel makers increase the offer. A shipbuilder source said the firm prefers domestic high grade steel products but the firm could import offshore steels depending on the price. The steel buyers including shipbuilders, appliances makers and construction related industry already increase the import to reduce the cost.

A trading firm source expects Japanese carbon steel import could be monthly 350,000 tonnes level or 2.1 million tonnes in July-September and the yearly import would reach 3.7-4 million tonnes in 2010.

The import increased by 51% to 335,200 tonnes in July from a year earlier. The import increased by 145.7% to 134,000 tonnes for plate, by 87.7% to 910,000 tonnes for wide hot rolled coil and by 63.9% to 460,000 tonnes for wide cold rolled coil in January-July. The galvanizing flat steel import doubled to 228,000 tonnes while the wire rod import increased by 36% to 190,000 tonnes.

The import from Asia was 2.084 million tonnes in January-July, which represented 97.7% of total import. The import increased by 69% to 1.267 million tonnes from South Korea, by 42% to 400,000 tonnes from Taiwan and by 187% to 410,000 tonnes from China. The major 3 countries have large portion for the import.