Japan Plate Demand to Recover in 2H of F2009

Japanese plate steel demand is expected to decrease by around 30% in April-June from same period of 2008. The makers’ order receipt decreased by 33.7% to 1.799 million tonnes for domestic market in April-June from same period of 2008, according to Japan Iron and Steel Federation. The export order decreased by 11.4% to 719,000 tonnes. An integrated steel maker source said the demand is severe in July-September more than April-June. The demand, however, is expected to improve in October 2009-March 2010 due to inventory adjustment by the dealers and demand recovery for some applications. The demand was very slow since late 2008. The demand for construction and industrial machinery, which is second largest plate application next to shipbuilding, decreased by 70-80% lower than a year earlier level. The demand could keep slow in Japan, USA and Europe while the demand recovers in China. The shipbuilding demand, which represents 50% of the plate demand, is firm so far due to 3-4 years of order backlog by shipbuilders. However, the new order receipt by shipbuilders is 70-80% lower than a year earlier level. The order backlog gets lower and the shipbuilding pace gets slower. The plate makers reduce the production under the slower demand. Japanese plate production decreased by 27.8% to 2.451 million tonnes in April-June from same period of 2008. The plate shearing processors’ inventory decreases gradually to 499,951 tonnes at end of June, which decreased to less than 500,000 tonnes for the first time in 6 months, while the stock hit 550,986 tonnes in March, according to the association. The demand is expected to bridge and building structure due to stimulus package. The demand is expected to increase toward second half of fiscal 2009 partly due to restocking after inventory adjustment.