Japan Wire Rod Demand to Rise Slightly for Jul-Sep

Japanese domestic demand for common steel wire rod and bar-in-coil is expected to recover 60% year-to-year level for July-September, which is now halving from a year earlier. The demand situation is unclear for building constructions after October. Domestic wire rod shipment volume would maintain flat in June from May. The demand is expected to recover in and after July. Some dealers forecast the demand recovery would be delayed though which was previously expected to reach 70% year-to-year level in the second half of fiscal 2009 (Oct09-Mar10).

Dealers and users are likely to almost finish inventory adjustment during April-June, according to a wire rod maker source. The demand for common steel wire rod for cold forging would recover when automobile output hit the bottom. Meanwhile, it is unclear when and how much range the demand recovers for building materials

Domestic wire rod makers are concerned about imported wire rod. POSCO, South Korean largest steel maker, is recently increasing wire rod production and likely to decrease the export to Japan. On the other hand, imports from China are expected to continue at a constant volume. Some steel wire processers are increasing consumption of imported wire rod.

Operation rate of wire processors seems to keep around 50% from a year earlier. Dealers’ sales volume would maintain flat.