Japan Dealers’ Steel Association Forecasts Severe Demand for Jan-Mar 2011

Japanese 3 steel dealers associations, dealers, coil centers and shearing processors, reported steel products’ supply and demand balance and inventory conditions for October-December as well as demand forecast for January-March 2011 to Ministry of Economy, Trade & Industry on Wednesday, They adopted a cautious approach to the market in the future when the demand turns down due to rebound of government’s stimulus programs though dealers’ inventory decreased for long products.

Dealers’ association said the market price is strong for long product in December when dealers’ sales increased and ferrous scrap price rose, and the inventory in the market decreased with depletion. O the other hand, the association made point the inventory of steel sheets increased and the demand isn’t stable in the future. The association explained dealers’ inventory decreased by 2.85 to 2.195 million tonnes at ended December 2010 from a year earlier, and 2.1% to 2.15 million tonnes at ended March 2011.

Coil Centers’ association expected coil centers’ shipping volume decreased by 1.6% to 3.65 million tonnes for January-March 2011 from October-December 2010 and 6.0% from the same period of last year. Automobile output slightly decreased despite of cutoff of grant money for eco-car and impact of higher yen rate, according to the association. The demand for appliance is strong thanks to speculate demand by eco-point and increased output of appliance for additionally inventory. O the other hand, the association apprehends hollowing of manufacturing industry by higher yen rate and rebound of strong demand, which appealed to need measure to avoid the hollowing.

The demand for construction machinery rebounded at 70% from peak level, but isn’t clear in the future by higher yen rate and shift of manufactures to overseas, according to shearing processors association. The association expects processors’ cutting volume increases by 8.85 to around 570,000 tonnes for October-December 2010 from July-September 2010, and decreases by 3.5% to 550,000 tonnes for January-March 2011 from October-December 2010.