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Steel Demand Prospects for the Second Quarter of FY2014 (July–September 2014)

Total steel demand for the second quarter of FY2014 (July–September 2014) is estimated to be 24.25 million tons, a 1.8% increase from the previous quarter and a 2.9% decrease on a year-on-year basis. The sector-by-sector breakdown is as follows.

Domestic demand

Construction: Steel demand will increase from the previous quarter due to seasonal factors, but decrease on a year-on-year basis due to a reactionary decline after the last-minute demand for construction before the consumption tax hike. However, it should be noted that a labor shortage and surges in labor costs have delayed the progress of construction work and have caused a lag in the timing of actual demand.

Manufacturing: Steel demand will be only slightly impacted by the reactionary decline after the consumption tax, and remain flat on a year-on-year basis due to steady demand related to business investment and an upward trend in demand for shipbuilding, while it will show slight increases from the previous quarter.

Steel exports

Exports of ordinary steel will show a slight increase from the previous quarter, where exports were curbed due to the repair of facilities, while it will decrease on a year-on-year basis as an excess supply of steel persists in Asia.

Crude steel demand for the period is estimated to be 27.96 million tons. While steel demand will increase from the previous quarter, crude steel demand will remain flat from the previous quarter, following the seasonal increase in production in the previous quarter. It will also remain the same on a year-on-year basis.

Steel Demand Prospects for the Second Quarter of FY2014 (July–September 2014)

(Unit: million tons)
  Total Steel
  Ordinary Steel Special Steel
Steel Demand 24.25 19.17 5.08
  Year-on-year change (24.98) −2.9% (19.85) −3.4% (5.12) −0.9%
Change compared with the previous quarter’s forecast (23.82) +1.8% (18.76) +2.2% (5.06) +0.3%
1) Domestic Demand 16.03 12.72 3.31
Year-on-year change (16.40) −2.3% (13.03) −2.4% (3.37) −1.8%
Change compared with the previous quarter’s forecast (15.71) +2.1% (12.41) +2.5% (3.30) +0.5%
2) Export 8.21 6.45 1.76
Year-on-year change (8.57) −4.2% (6.82) −5.5% (1.75) +0.8%
Change compared with the previous quarter’s forecast (8.11) +1.2% (6.35) +1.6% (1.76) +0.1%

References

Crude steel demand equivalent to shipment: 27.96 million tons
Year-on-year change: (27.72 million tons) +0.9%
Change from the previous quarter’s forecast: (27.95 million tons) +0.1%

Ordinary steel: Inventory of makers and wholesalers
Inventory of makers and wholesalers (end-June forecast): 6.53 million tons;
Inventory turnover: 1.04 months
Inventory for domestic market among the above inventory (end-June forecast): 5.67
million tons; Inventory turnover: 1.36 months

Note 1: The figures in parenthesis show the quantity for the same period of the previous year or the previous quarter's forecast for comparison purposes (in millions of tons).

Note 2: The total steel amount does not always correspond to the combination of subtotals since those figures are calculated per thousand tons.

Reference for Demand Prospects (Second Quarter of FY2014 (July–September 2014))

1. Trends in Crude Steel Production (Unit: thousand tons)

  FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014
1Q 31,060 19,093 28,067 26,368 27,498 28,073 27,945
2Q 30,448 24,236 27,357 26,950 27,260 27,724 27,960
3Q 26,397 26,609 27,665 26,579 25,909 28,139  
4Q 17,596 26,511 27,704 26,566 26,637 27,567  
Total 105,500 96,449 110,792 106,462 107,304 111,503 55,905

Note 1) The data for the fourth quarter of FY2013 is the forecasted result and the data for the first quarter of FY2014 represents prospects.

2. Ordinary Steel: Sector-by-Sector Domestic Consumption (Unit: thousand tons)

Sector FY2013 2Q actual consumption FY2014 1Q consumption forecast FY2014 2Q prospects
Year-on- year change Change compared with the previous quarter’s forecast
Construction 5,844 5,331 5,524 −5.5% 3.6%
  Civil Engineering 1,622 1,495 1,660 2.3% 11.0%
Architecture 4,222 3,836 3,864 −8.5% 0.7%
Manufacturing 7,186 7,079 7,196 0.1% 1.7%
  Shipbuilding 1,025 1,078 1,086 6.0% 0.7%
Motor Vehicles 2,867 2,846 2,849 −0.6% 0.1%
Industrial Machinery 1,274 1,199 1,265 −0.7% 5.5%
Electrical Machinery 788 756 789 0.1% 4.4%
Secondary Products 589 571 585 −0.7% 2.5%
Containers 328 313 306 −6.7% −2.2%
Other 315 316 316 0.3% 0.0%
Total 13,030 12,410 12,720 −2.4% 2.5%

Note 2) The quantity is estimated mainly based on demand-related statistics.

Release Date

July 2, 2014

Division in Charge

Iron and Steel Division, Manufacturing Industries Bureau

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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