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Steel Demand Prospects for the Fourth Quarter of FY2014 (January-March 2015)

Total steel demand for the Fourth Quarter of FY2014 (January–March 2015) is estimated to be 24.51 million tons, a 0.6% increase, remaining flat from the previous quarter, and a 1.3% decrease  on a year-on-year basis, decreasing slightly. The sector-by-sector breakdown is as follows.

Domestic demand
Construction: Steel demand in the construction sector will decrease from the previous quarter due to seasonal factors. On a year-on-year basis, it will also decrease due to a reactionary decline to the last-minute demand preceding the consumption tax hike. The demand in civil engineering works will decrease from the previous quarter as well as on a year-on-year basis due to the dissipation of the effect of the earlier implementation of the budget for the sector. The demand in the architecture sector will remain flat from the previous quarter and will decrease on a year-on-year basis, while that for distribution warehouses will be robust.

Manufacturing: Steel demand in the manufacturing sector will slightly increase from the previous quarter and will decrease on a year-on-year basis. The demand in motor vehicles and electrical machinery will increase from the previous quarter due to seasonal factors. Looking at demand on a year-on-year basis, demand in shipbuilding will increase, while that for motor vehicles will decrease. Demand in industrial machinery will increase on a year-on-year basis along with increasing business investment, including machine tools, while that in construction machinery will decrease on a year-on-year basis due to a reactionary decline after the last-minute demand before the tightening of vehicle exhaust gas regulations. A slight decrease on a year-on-year basis will also be shown in the industrial machinery sector as a whole.

Steel exports
Steel exports will show an increase from the previous quarter due to differences among energy-project-related exports. Exports of ordinary steels will increase on a year-on-year basis due to the fact that the high-level domestic demand was given priority over exports in the same period of the previous year, although an excess supply of steel continues to persist in Asia.

Crude steel demand for the period is estimated to be 27.30 million tons, decreasing by 2.0% from the previous quarter as well as by 1.0% on a year-on-year basis, and is expected to be lower than that in the same period of the previous year for two consecutive quarters. Demand for FY2014 is estimated to be 110.71 million tons in FY2014, a decrease by 0.7%, remaining flat compared with the previous fiscal year.

Steel Demand Prospects for the Fourth Quarter of FY2014 (January-March 2015)

(Unit: million tons)
Total Steel
Ordinary Steel Special Steel
Steel Demand 24.51 19.47 5.04
Year-on-year change (24.84) -1.3% (19.68) -1.1% (5.16) -2.4%
Change compared with the previous quarter’s forecast (24.36) +0.6% (19.33) +0.7% (5.03)+0.1%
1) Domestic Demand 16.13 12.82 3.31
Year-on-year change (16.64) -3.1% (13.23) -3.1% (3.42) -3.2%
Change compared with the previous quarter’s forecast (16.18) -0.3% (12.88) -0.5% (3.30) +0.4%
2) Export 8.38 6.65 1.73
Year-on-year change (8.19) +2.2% (6.45) +3.0% (1.74) -0.8%
Change compared with the previous quarter’s forecast (8.18) +2.4% (6.45) +3.1% (1.73) -0.4%

References:

Crude steel demand equivalent to shipment: 27.30 million tons
Year-on-year change: (27.57 million tons) −1.0%
Change from the previous quarter’s forecast: (27.85 million tons) −2.0%

Ordinary steel: Inventory of makers and wholesalers
Inventory of makers and wholesalers (end-December forecast): 6.71 million tons; inventory turnover: 1.08 months
Inventory for domestic market among the above inventory (end-December forecast): 5.88 million tons; inventory turnover: 1.45 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 (Fourth Quarter of FY2014 (January-March 2015))

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 28,081 27,672
2Q 30,448 24,236 27,357 26,950 27,260 27,737 27,890
3Q 26,397 26,609 27,665 26,579 25,909 28,139 27,853
4Q 17,596 26,510 27,705 26,566 26,638 27,567 27,295
Total 105,500 96,448 110,793 106,462 107,305 111,523 110,710

Note 1) The data for the third quarter of FY2014 is the forecasted result and the data for the Fourth Quarter of FY2014 represents prospects.

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

Sector FY2013 4Q actual consumption FY2014 3Q consumption forecast FY2014 4Q prospects
Year-on- year change Change compared with the previous quarter’s forecast
Construction 5,807 5,783 5,601 -3.5% -3.1%
Civil Engineering 1,835 1,898 1,741 -5.1% -8.3%
Architecture 3,972 3,885 3,860 -2.8% -0.6%
Manufacturing 7,419 7,097 7,219 -2.7% 1.7%
Shipbuilding 1,078 1,100 1,104 2.4% 0.4%
Motor Vehicles 2,946 2,734 2,814 -4.5% 2.9%
Industrial Machinery 1,308 1,291 1,310 0.2% 1.5%
Electrical Machinery 802 756 799 -0.4% 5.7%
Secondary Products 605 595 582 -3.8% -2.2%
Containers 338 312 297 -12.1% -4.8%
Other 342 309 313 -8.5% 1.3%
Total 13,226 12,880 12,820 -3.1% -0.5%

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

Release date

December 24, 2014

Division in charge

Iron and Steel Division, Manufacturing Industries Bureau

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