Slowing Japan Plate Steel Demand

Japanese plate steel demand gets slower recently when the activity of construction machinery and steel structural building decreases since January. The demand condition increases uncertainty while the supply is balanced when the demand is high level for shipbuilding and bridge. Electric furnace steel makers already reduce the production. Integrated steel makers started to be cautious though they are still keeping high level production.

The plate demand halved for construction machinery compared with July-September level. The construction machinery makers are in major production cut to meet slow demand and to reduce inventory. The plate demand for steel structural building is estimated to decrease by more than 10% when private sector reduces the capital expenditure.

The shipbuilding plate demand keeps high level at more than 400,000 tonnes per month when shipbuilding makers keep around 4 years of order backlog. The bridge plate demand keeps the pace as expected.

Plate making electric furnace steel makers are in major production cut. Chubu Steel Plate reduces the production by 40-50% in February and March from the peak while Tokyo Steel Manufacturing keeps low level production at monthly 20,000 tonnes.

Integrated steel makers keep still high level production. They divert the shipment from construction machinery and building to shipbuilders. An industry source said they will keep full capacity operation through March. However, their operation could decrease sooner or later when shipbuilders’ order receipt for export decreased by 80-90% since October compared with a year earlier level.