Japan Carbon Steel Order Drops by 10% in May

Japanese carbon steel order decreased by 10.1% to 5.122 million tonnes in May from a year earlier, which decreased for 3 months in a row and hit the lowest level since June 2009, announced by Japan Iron and Steel Federation on Monday. The domestic order decreased by 10.2% to 3.255 million tonnes when the automobile order decreased by 41.1% due to supply chain disruption. The total domestic order decreased for 3 months in a row. The order for export decreased by 10.0% to 1.867 million tonnes, which decreased to less than 2 million tonnes for the first time in 21 months. The export order decreased for 4 months in a row and hit more than 10% decrease for 2 months in a row.

The carbon steel domestic order decreased by 21.2% to 1.418 million tonnes for manufacturing in May from a year earlier. The order decreased mainly by the slow automobile demand despite of recovering demand of construction machinery, industrial machinery and electrical equipment. The automobile order decreased by 41.1% to 442,000 tonnes.

The order increased by 2.7% to 834,000 tonnes for construction in May from a year earlier. The building order decreased by 3.1% to 432,000 tonnes and the civil engineering order increased by 4.9% to 202,000 tonnes. The order increased by 15.0% to 201,000 tonnes for other construction including fastenings and materials used in temporary construction.

The order decreased by 1.0% to 1.003 million tonnes for distributors in May from a year earlier when around 70% of the volume is used for construction.

The demand is increasing for automobile. However, the export would not easily increase under low Asian market price due to supply increase by China and South Korea and high yen exchange rate at 80-84 yen per US dollar.