Japan Special Steel Bar & Wire Makers See Recovery in Second Half

Japanese special steel bar and wire rod shipment would be 75-80% for second half of fiscal 2009 ending March 2010 compared with first half of fiscal 2008 when automobile production is expected to increase, according to maker sources. The car production could decrease when the firm car sales is supported by subsidy and tax cut. However, the shipment of special bar and wire rod would be higher level in second half than expected in April when many sources estimated the shipment in second half would decrease to less than 70% of level in same period of fiscal 2008.

Japanese special steel bar and wire rod shipment is expected to decrease by 35% in July-September from same period of 2008 after the shipment is estimated to decrease by 50% in April-June from same period of 2008 as expected.

Japanese car makers revised the domestic production plan upward by around 150,000 units to 2.45 million units for October-December as of September from the plan in August. Their plan in September is 2.55 million units for January-March, which is around 100,000 units higher than the plan in August. The higher automobile production could lift the shipment of special steel bar and wire rod, of which majority of the application is for automobile. However, truck and car export remains low.

The inventory adjustment of construction machine is expected to finish soon. However, the bar and wire rod shipment for construction machinery in the second half would stay at around 50% of the level in first half of fiscal 2008 when the lead time from steel order receipt to end use takes about 5-6 months.