Japan Welded Steel Pipe Makers to Keep 50-60% Production Cut in April-June

Japanese major welded steel pipe makers keep the major production cut in April-June as 50-60% year to year cut in January-March. The demand is slump for structural pipe and construction application along with very slow demand for mechanical tube for automobile and construction machinery. The makers try to improve the supply balance even at the cost of the profitability.

Domestic automakers and construction machinery makers reduce the steel order under the sales slump impacting on the mechanical tube demand. The dealers and steel pipe buyers minimize the purchase waiting lower market price reducing the pipe demand for construction applications. The pipe makers started 20-30% year to year production cut since November. The makers expanded the production cut to 50-60% in January-March.

A major steel pipe maker source expects the automotive production could improve in April-June when the automakers try to inventory adjustment. However, the maker source expects the pipe makers would have to keep major production cut even if they could increase the production slightly when construction machinery demand is expected to keep slow through the year along with construction applications.