Japan Stainless Steel Supply Loosening by Slow Demand

Japanese stainless steel supply and demand balance is loosening due to slowdown of the actual demand. The demand forecast by Ministry of Economy, Trade & Industry decreases by 32.5% to 125,000 tonnes per month for January-March 2009 from the same period of last year and downed by 21.7% from October-December 2008. The demand is expected to decrease more than the forecast.

Japanese stainless steel makers are reducing their output by over 50% compared with the capacity and skipping acceptance of order for 6 months. But the market inventory hasn’t shrunk well due to low sales at dealers. Some maker and dealer sources prospect the supply and demand balance might tighten after October at the earliest.

A major dealer source said the demand dropped from mid November rapidly and more dropped after the beginning of this year. The users are likely to hold conservative buying until steel market price hits the bottom. A maker source said the demand from environmental industries, such as solar battery, is decreasing when manufactures postponed or cancelled the investment and the demand for appliance is also getting worse.

The order for Japanese stainless steel sheet decreased by 46% to 119,250 tonnes in November 2008 from a year earlier and by 12.2% from last month, according to Japan Stainless Steel Association. Japanese stainless steel export including flat, long, pipe decreased by 25.8% in November from a year earlier and by 33.3% from October. The export for January-March is expected to decrease by 22.2% to 52,300 tonnes per month. Chinese stainless steel import might impact domestic supply and demand.