Japan Iron Frame Demand to Recover after October

Japanese iron frame demand is estimated to decline by 30% to 1 million-1.1 million tonnes for July-September compared to the same period last year, according to integrated steel maker source. The demand for fiscal 2009 ending March 2010 is estimated to decline by about 20% to 4.5 million tonnes from fiscal 2008. The source forecasts that the demand bottoms out during first half of fiscal 2009. The demand could recover after October.

Integrated source estimated that the demand of iron frame would decline by about 10% to 5.3 million tonnes for fiscal 2009 from fiscal 2008. However, the demand declined for April-May to an adjusted annual rate of only 3.5 million tonnes, which is the very low level compared with normal year. The demand was about 310,000 tonnes in April and about 280,000 tonnes in May, declining from 380,000 tonnes in March. The source said, the demand is estimated at 900,000 tonnes at the maximum for April-June.

The demand would increase due to the recovery of capital expenditure or public works after October. If the steel makers reflect the surging ferrous scrap cost to product price, suspended construction projects could start because of the sweep of expectation for lower price. Application building certification increases after March. The integrated steel source expects the demand for second half increase to around 2.5 million tonnes for second half of fiscal 2009 compared with around 2 million tonnes for first half.

The recent peak of iron frame demand is around 7.8 million tonnes per for fiscal 2000 and the demand is around 7 million tonnes per fiscal year until fiscal 2006. However, the demand dropped to 6.4 million tonnes for fiscal 2007 due to the revision of building acts. The demand was 5.9 million tonnes for fiscal 2008 because of global recession.