Japanese Steel Plate Supply to Decrease in 2009

Japanese steel plate supply and demand balance is becoming loose. Steel plate supply decreased rapidly to construction machinery and export. Domestic building constructions are decreasing due to adjournment of business investment. Japanese integrated steel makers keep high operation rate mainly for shipbuilding. However, electric furnaces had already reduced the output mainly for dealers, construction machinery and industrial machinery.

Nakayama Steel Works continues the output cut since last autumn. Chubu Steel Plate decreased the output by 15% in January compared with the initial plan and will more reduce the output in February and March.

Japanese construction machinery’s shipment dropped rapidly in and after autumn. The shipment value for construction machinery decreased by 21.5% to 171.9 billion yen in November 2008 from a year earlier. The export of construction machinery decreased by 15% in November from a year earlier, which represented year-on-year down for the first time in 80 months.

Order receipt volume has almost halved at many Japanese shearing processors since December compared with April-September 2008. A construction machinery source said their contract volume is expected to decrease more in fiscal 2009.

Japanese steel plate export decreased by 10.8% to 251,092 tonnes in November from a year earlier, which decreased by 12.9% to 143,284 tonnes to South Korea. South Korean users took precedence to purchase domestic plate due to cheaper won rate, while some users are purchasing Chinese steel plate. Steel plat output of Japanese integrated steel makers is expected to decrease when shipbuilding award volume shrank by 11.5% for January-November 2008 from the same period of last year.