Japan Cemented Carbide Tool Shipment Slow Down in July

Japanese domestic shipment of cemented carbide tools increased by 2% to 30.721 billion yen in July from a year earlier, according to Japan Cemented Carbide Tool Manufacturers’ Association (JCTMA). One-digit year-on-year growth continued for 5 months in a row. The growth is slowing down and might turn to minus soon. The demand is impacted by automakers’ output reductions and manufacturing industries’ less capital investment policies.Cemented carbide tool shipment strongly links with machine tool makers’ order reception. Order reception value at Japanese machine tool makers, those who belong to Japan Machine Tool Builders’ Association, represented y/y down for 3 straight months since June 2008. The down range was as wide as 14.2% in August at a quick estimation by the association. Tool shipment is expected to follow the trend and weaken more.Cemented carbide tool shipment kept y/y positive growth so far. However, an official of JCTMA said the current growth is sustained by tool makers’ order backlogs. Tool makers’ new order reception seems decreasing recently. Domestic demand is especially weakening. JCTMA previously estimated annual tool shipment would increase by 3.5% to 369.8 billion yen in fiscal 2008 (Apr08-Mar09) from fiscal 2007. However, the estimation might waver downward.