Japan H-Beam Demand to Drop Less Than 3 Million Ton in F2009

Japanese H-beam demand is expected to decrease to less than 3 million tonnes without fixed outer dimension H-beam in fiscal 2009 started April, according to Nippon Steel and other sources. The demand could decrease to 700,000-750,000 tonnes in April-June while the industry expected to be around 850,000 tonnes. The industry interests expect the demand would improve in July-September but the full swing recovery could be in fiscal 2010.

The industry interests revised the outlook downward in May to 3.1-3.2 million tonnes in fiscal 2009 from original 3.4-3.5 million tonnes of demand as of April. However, the interests again revised the outlook downward to just less than 3 million tonnes compared with just more than 3.5 million tonnes in fiscal 2008 when the demand is slower due to low level housing starts and dropping market price.

An integrated steel source said the demand decreases due to cancelation and postpone of building plans under uncertainty for economy recovery. The industry interests expect the slow demand continues through summer. The demand could decrease by around 25% to 750,000-800,000 tonnes in July-September from same period of 2008 decreasing by 25-30% to 1.45-1.55 million tonnes in April-September.

The industry expects the demand would improve in second half of fiscal 2009 from the first half. However, the demand could be 1.5 million tonnes in the second half, which is as low as second half of fiscal 2008.

The recovery depends on rebound of market price. The market price shows sign to hit bottom after Nippon Steel cut H-beam price by 13,000 yen per tonne. However, some interests see the decreasing H-beam price for civil works indicates lower market price.

Fixed outer dimension H-beam demand could decrease by around 35% to around 300,000 tonnes in fiscal 2009 from fiscal 2008. The demand decreased to around 470,000 tonnes in fiscal 2008 from the peak of around 500,000 tonnes in fiscal 2007.