Japan Construction Machine Production Forecasted to Double in F2010

Japanese construction machine production is forecasted to double in fiscal 2010 ending in March 2011 against fiscal 2009. The production significantly decreased in fiscal 2009 after world financial crisis while strongly recovered in emerging countries including China. Japanese construction machine makers are in operations as high as the recent peak. Steel demand has improved along construction machine makers’ output recovery. Carbon steel plate demand is expected at 600,000 tonnes for fiscal 2010 and 1.5 million tonnes for special steel applied to construction machines.

Japanese construction machine makers’ shipment is forecasted to increase by 41% to 1.51 trillion yen for fiscal 2010 compared with fiscal 2009, according to Japan Construction Equipment Manufactures Association. The shipment value is expected to rebound after 3 years. The shipment is estimated to increase by 3% for domestic market due to slow when public investment while to increase by 61% for offshore market, mainly China and Asia. Especially, the shipment of hydraulic shovel is expected to triple.

Japanese production of carbon steel plate and special steel products, those which are used for construction machines, has recovered. Japanese special steel output recovered to above 80% level in April-June compared with the pre-shock peak level. One plate processor says they have continued full operation since April.

The association forecasts the demand for construction machine increases by 10% year-on-year in fiscal 2011. Steel makers are building up supply systems to meet strong orders. Meanwhile, some steel makers are concerned whether the demand keeps favorable growth in fiscal 2011 despite of high raw material cost and strong yen exchange rate.