Japan Ferroalloy Demand Hits First Drop in 9 Years

Japanese ferroalloy consumption at steel making process decreased by 4.4% to 2.399 million tonnes in 2008 from 2007, which was the first drop in 0 years, according to Japanese industry association. The demand decreased mainly for ferrochrome and ferronickel under major production cut by stainless makers. The ferroalloy demand is likely to decrease more in 2009 when Japanese raw steel production decreases significantly now and is expected to decrease from 2008.

Japanese ferroalloy production decreased by 3.0% to 997,000 tonnes in 2008 from 2007, which was the first drop in 2 years. The production decreased by 14.3% for major item of ferronickel while the largest item of ferromanganese production increased.

Japanese raw steel output was historical high level in first half of 2008 but the yearly production decreased due to demand slump in late 2008. The ferroalloy demand kept the year to year increase even in 2001 and 2005 when the raw steel production decreased from previous year. However, the ferroalloy demand decreased when demand for ferronickel and ferrochrome, which represent 44% of total ferroalloy demand, decreased under major production cut by stainless makers.

Japanese raw steel output decreased by 40.9% in January-February from same period of 2008 and the output is expected to decrease to less than 18 million tonnes in January-March. The production is likely to keep low level in April-June and the recovery is expected to be limited in and after July. The ferroalloy demand could decrease in 2009 from 2008 when the raw steel production could decrease to less than 100 million tonnes in 2009 for the first time in 10 years.