Japan Plate Steel Demand to Drop by 10% in 1H F2009

Japanese plate steel demand is expected to decrease to much less than 5 million tonnes in the first half year of fiscal 2009 starting April. The demand decreases to around 5 million tonnes in the second half of fiscal 2008 due to worldwide slow demand from 5.7 million tonnes in the first half year, according to integrated steel maker sources. The demand is likely to decrease by more than 10% in and after April from current level when the demand shrink is still uncertain for construction materials and each application. The boomed shipbuilding demand shows also sign to decrease.

The shipbuilding demand, which represents around 50% of the domestic plate demand, decreases by around 10% in the first half of fiscal 2009 from the second half of fiscal 2008. Japanese shipbuilders order receipt decreases by 80-90% in and after October 2008 from a year earlier level due to slump in ocean freight market. The shipbuilders still have around 3 years of order backlog but the building activity is slowing from the peak when some ship owners seek later delivery.

The plate demand for construction machinery is likely to decrease to less than 300,000 tonnes in the first half of fiscal 2009. The demand in the second half of fiscal 2008 decreases by around 60%from same period of fiscal 2007 and by around 10% from the first half of fiscal 2008. The machinery demand is expected to keep inventory adjustment through September 2009.

The industrial machinery plate demand decreases by around 20% in the first half of fiscal 2009 from the second half of fiscal 2008. The plate demand for steel structural building also decreases in the first half from near 600,000 tonnes in the second half of fiscal 2008.