Japan Rebar Demand to Hit 32-Year Low in F2009

Japanese concrete reinforcing steel bar demand could hit 32-year low in fiscal 2009 started April. The demand would decrease for 3 years in a row when trading firms and rebar makers expect the demand will be 8-8.5 million tonnes, which is 10% lower in the lower case than fiscal 2008. The demand is expected to recover in second half of the year with support by stimulus package but the demand in private sector could decrease more.

The rebar demand decreased by 25% to around 2 million tonnes in October-December 2008 from same period of 2007. The demand is estimated to decrease to 1.8 million tonnes in January-March, which is 30% lower than same period of 2008. The demand is estimated to be 8.7-8.8 million tonnes in fiscal 2008, which is lower than 10.47 million tonnes in fiscal 2007 and first drop to less than 10 million tonnes in 25 years and to less than 900 million tonnes in 26 years.

The demand is expected to improve in April-June from January-March but the expectation is in range of 1.8-2 million tonnes, which is 20% lower in higher case from same period of 2008. The demand could improve in late 2009 but the interests expect the demand would be low level at least through June.

The stimulus package could lift the demand level in second half of fiscal 2009. However, the private sector’s demand could decrease more when real estate firms’ construction investment decreased by near 70% at the statistics for construction companies’ order receipt in February from a year earlier, according to Japanese government. If the economy would continue low level, the private sector’s investment could keep very low level reducing the rebar demand.