Japan Steel Frame Fabricators Forecast Sales and Profit Down for F2010

Japanese major 12 steel frame and bridge fabricators posted year-on-year lower net sales for April-June 2010. The operating profits recovered from a year earlier at 10 fabricators and 2 of them returned to the black thanks to cost cut efforts. Meanwhile, the 8 fabricators forecast year-on-year negative sales and profits for a full year of fiscal 2010 ending in March 2011 among 9 fabricators those who announced full year financial outlook.

The order volume is totally shrinking for steel frame and bridge constructions. Japanese fabricators are suffered from severe order receiving competition. Their quarterly order receipt value declined for April-June 2010 against a year earlier at several fabricators including Kawada Technologies, Komai Tekko, Miyaji Engineering Group, Tomoe Corporation, JST and Sakurada.

The domestic demand for steel frame was approximately 3.91 million tonnes in fiscal 2009, which decreased by 33.7% from the previous year and represented minus for 3 years in a row. The demand is estimated at around 4 million tonnes in fiscal 2010 with less public engineering and private sectors’ construction. Large construction projects are relatively moving in metropolitan cities but some projects are said to be delayed.

As to public engineering, Japanese governmental budget for road construction was reduced by around 20% in fiscal 2010 compared with fiscal 2009. Orders for domestic bridge constructions are also expected to decrease. The orders were 370,000 tonnes in fiscal 2007, 320,000 tonnes in fiscal 2008 and 250,000 tonnes in fiscal 2009. The order volume is estimated at around 200,000 tonnes in fiscal 2010.