Japan Steel Demand Rises by 33.4% in January-March

Japanese steel demand increases by 33.4% to 23.9 million tonnes in January-March 2010 from same period of 2009, announced by Ministry of Economy, Trade and Industry on Friday. The demand represents 26.72 million tonnes of raw steel demand, which is 51.9% higher than same period of 2009. The steel demand is 2.2% higher from October-December when the export increases for South Korea, China and Asian nations and the domestic demand improves for automobile and manufacturers while the domestic construction demand decreases. The raw steel output decreases slightly from October-December due to lower construction demand and lower semi-finished steel export while the output increased in every quarters since April-June 2009.

METI warns the construction demand could be lower in January-March than the estimation. The ministry expects the makers should adjust the production depending on the demand and inventory level. METI also warns the higher export could result in trade dispute when the carbon steel export s 7.4 million tonnes and represents 38% of carbon steel demand.

The domestic automobile production is 2.49 million units for finished car in January-March, which is 1.8% higher than October-December and 54.9% higher than same period of 2009, and 1.86 million units for knockdown sets, which is 0.7% higher than October-December and 89.8% higher than same period of 2009. The total automobile production is 4.36 million units, which is 1.3% higher than October-December and 68.1% higher than same period of 2009. METI expects the shipbuilding activity is higher and total manufacturing demand is higher than October-December.

METI expects the construction demand decreases for carbon steel in January-March from October-December when the administration stopped 40% of supplemental national budget for civil works.

METI expects carbon steel inventory held by makers and distributors is 5.48 million tonnes at end of December, which represents 0.89 months of the shipment. The inventory for domestic market is 4.52 million tonnes, which 1.18 months. METI expects the inventory decreases by 200,000 tonnes both for total and domestic market by March 2010.