Japan Shipbuilders’ Steel Consumption to Increase by 11.5% in F2009

Japanese shipbuilders’ purchase volume of steel products is expected to total 5.258 million tonnes through fiscal 2009 starting April, increasing for 3 consecutive years, according to Shipbuilders’ Association of Japan. The purchase volume would increase by 11.5% from previous fiscal year and hit the record high since fiscal 1975. The purchase volume is estimated to increase by 11.2% to 4.714 million tonnes in fiscal 2008 from previous fiscal year. Japanese shipbuilders have accepted a large number of orders since 2003 and still hold order backlogs for over 3 years.

Steel consumption for shipbuilding or marine structure keeps increasing from 1987. New ship demand is expanding with the increase of marine distribution along economic growth in emerging countries. Japanese shipbuilders’ order backlogs totaled 63.641 million gross tonnes or 1,607 ships at the end of December 2008. Japanese ship completions was 18.632 million gross tonnes or 560 ships through 2008, which kept around 18 million gross tonnes since 2006. Calculated from these figures, Japanese shipbuilders still hold backlogs for 3 years and 6 months.

Steel consumption for shipbuilding or marine structure is expected to total 4.445 million tonnes for steel plate, 460,970 tonnes for shaped steel, 134,072 tonnes for steel tube, 178,592 tonnes for steel bar and 39,426 tonnes for other steel products through fiscal 2009.

On the other hand, new ship order volume is decreasing by 10-20% after last autumn compared with previous year. Marine distribution shrank after global economic crisis. Some shipbuilders might cancel or postpone their orders.

There seems no large order cancel for Japanese shipbuilders because ordering parties for Japanese shipbuilders is mainly Japanese. The association expects cancellation keeps low for Japanese shipbuilders compared with Chinese or South Korean shipbuilders.