Japan Carbon Steel Import to Hit 24 Years Low in 2009

Japanese carbon steel import is expected to be around 2.5 million tonnes in 2009, which is more than 30% lower than 2008 and the lowest level since 1985. The lower import is apparently due to slower flat steel domestic demand and buyers’ shift to Tokyo Steel Manufacturing and other domestic makers’ plate and hot rolled coil.

The plate import is expected to decrease by around 55% to 97,000-100,000 tonnes in 2009 from 2008. The import will be 1-1.05 million tonnes for hot coil and 570,000-600,000 tonnes for cold rolled coil, which are 37-40% and around 40% lower respectively.

The carbon steel import has decreased every year since the recent peak in 6.14 million tonnes in 1995. The import was relative high at 3.74 million tonnes in 2006, 3.79 million tonnes in 2007 and 3.7 million tonnes in 2008.

However, the domestic steel demand decreased in 2009 due to very slow economy. Domestic users’ activity is very slow for construction machinery, industrial machinery, civil work and building. Domestic steel price also decreased widely and some items’ price halved from the peak.

Offshore steel makers shift from slow demand Japan to other destinations. The offshore suppliers reduced the flat steel export to Japan especially for wholesalers while the suppliers try to keep the flat steel shipment for contract users including automakers and shipbuilders.

Domestic welded pipe makers and rerollers try to reduce the overstock and reduced the import. The dealers, coil centers and shearing processors also reduced the import to reduce the stock. The carbon steel import was only 1.934 million tonnes in January-October.

The offshore suppliers usually increase the export to Japan in November and December to liquidate the inventory. However, an importer source expects the import is at most 250,000-260,000 tonnes both in November and December. With the numbers, the import could be only around 2.5 million tonnes for 2009.