Japan Shipbuilders’ Steel Use to Drop by 4.1% in F2011

Japanese steel consumption would decrease by 4.1% to 4.297 million tonnes for shipbuilding and marine structure in fiscal 2011 started April from fiscal 2010, according to survey to 19 members of Shipbuilders’ Association of Japan. The consumption would have increased by 0.3% to 4.483 million tonnes in fiscal 2010 from fiscal 2009. However, the consumption was slightly less than the recent peak of 4.628 million tonnes in fiscal 2008.

The shipbuilders’ order backlog is decreasing despite the new order receipt turned upward. The steel consumption and ship construction had been high level thanks to the higher backlog. However, the steel consumption and the construction could slow due to the lowering backlog.

Japanese shipbuilders’ order backlog is decreasing from the peak of 65.61 million gross ton at the end of March 2008, according to Japan Ship Exporters’ Association. The backlog decreased by 30% to 44.393 million gross ton at the end of March 2011 from the peak when new order receipt significantly decreased in fiscal 2008 and 2009 due to global recession.

Japanese shipbuilders’ new order receipt increased in fiscal 2010 along with economic recovery. The order receipt increased by 95.5% to 12.422 million gross ton in fiscal 2010 from fiscal 2009. However, the order was around 60% level of recent peak in fiscal 2007 and 2008. The shipbuilders’ backlog would continue decreasing when the order is lower than the ship construction.

Shipbuilding industry in China and South Korea grows sharply in recent years. Japanese shipbuilders have to compete with the rivals severely to get order. Japanese shipbuilders are developing environment friendly ship by utilizing the technical advantage under oversupply concern. However, Japanese shipbuilders couldn’t gain higher share in the severer market.

Japanese steel plate consumption estimation is 3.734 million tonnes in fiscal 2011. The demand is 337,676 tonnes for sections, 91,517 tonnes for pipe and 126,100 tonnes for bar.