Japan H-Beam Demand to Drop Further

Japanese H-beam demand would decrease by around 20% to around 2.7 million tonnes except for products with fixed outer dimension in fiscal 2009 started April from fiscal 2008, according to estimate by domestic integrated steel makers. The demand decreases along with plate and column steel when steel structural building activity is historical low. The demand is recovering toward second half of the year but the recovery is limited and the level is as low as second half of fiscal 2008.

The structural steel demand in building is estimated to be around 4.5 million tonnes in fiscal 2009, which is around 20% lower than fiscal 2008 and represents around 40 years low. The demand of rolled steel column is expected to decrease by around 25% to 350,000 tonnes in the year from fiscal 2008.

Japanese integrated steel makers expected the H-beam demand would be 3.4-3.5 million tonnes as of April. However, they revised the estimate downward to 3.1-3.2 million tonnes and again to less than 3 million tonnes due to very slow housing starts and investment for building in private sector.

Building start of steel structural building decreased by 47.9% in floor space in May from a year earlier. The building start for nonresidential building decreased by 43.2% and the start of building by manufacturers decreased by 66.9%. Private sector’s cancelation and postpone of building plans reduces the steel demand.

The H-beam demand is expected to around 650,000 tonnes in July-September as April-June. Domestic integrated steel makers expect the demand recovers to around 1.4 million tonnes in second half of fiscal 2009 from 1.3 million tonnes in the first half.

Japanese H-beam demand was 6.9 million tonnes in the peak in fiscal 1990. However, the demand decreased to 3.3 million tonnes in fiscal 2002. The demand recovered 4.1 million tonnes level in fiscal 2006 but the demand again decreases in recent years.