Japan Automotive Steel Pipe Demand to Rise by 10% in Oct-Dec

Japanese steel pipe makers will increase automotive pipe production by around 10% in October-December from July-September under higher demand for automotive mechanical pipe when domestic automakers increase the production and sales. The production recovers 70-80% level of the peak in 2007.

Domestic automakers reduced the inventory at their each process when their volume of sales and production dropped sharply for domestic market, export and offshore operations. Domestic pipe makers were forced to reduce the production since November 2008 due to lower order from automakers.

The automakers and parts makers finished the inventory adjustment by June. The pipe makers’ operation improves gradually after the automotive pipe demand hit bottom. The pipe makers’ production is 65-70% of the peak for automotive pipe.

Japanese automakers plan to increase the production by around 7% to 2.28 million units in October-December from July-September. The production is still around 20% lower than the peak in same period of 2007. However, the automakers’ activity improves when the sales turned into year-to-year increase in August for the first time in 13 months. With finished inventory adjustment by pipe drawers, the automotive pipe apparent consumption will increase in October-December.