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Steel Demand Prospects for the Second Quarter of FY 2015 (July-September 2015)

Total steel demand for the second quarter of FY 2015 (July-September 2015) is estimated to be 24.21 million tons, a 3.0% increase from the previous quarter and a 3.4% decrease on a year-on-year basis. The sector-by-sector breakdown is as follows.

Domestic demand
Construction: Steel demand in the construction sector will increase from the previous quarter due to seasonal factors. On a year-on-year basis, the demand in civil engineering will decrease because it was at a high level in the same period of the previous year due to the effect of the accelerated implementation of the budget for the sector. Regarding demand in the architecture sector, the demand in housing construction will be higher than that in the same period of the previous year, while that for non-housing construction will decrease due to the relatively high level of demand in the same period of the previous year. On a year-on-year basis, a decrease will also be seen in the architecture sector as a whole.

Manufacturing: Steel demand in the manufacturing sector, including that for motor vehicles and industrial machinery, will increase from the previous quarter due to seasonal factors. On a year-on-year basis, it will decrease due to a decrease in the demand for motor vehicles and industrial machinery. Regarding demand in industrial machinery, that for machine tools will remain at a high level, while that for construction machinery will decrease due to a reactionary decline following the last-minute increased demand before the tightening of vehicle exhaust gas regulations. On a year-on-year basis, a decrease will also be seen in the industrial machinery sector as a whole.

Steel exports
Steel exports will remain flat from the previous quarter and will decrease on a year-on-year basis. On a year-on-year basis, exports of ordinary steels will slightly decrease due to the effects of an excess supply of steel continuing to persist in Asia. Exports of special steels will decrease compared to those in the same period of the previous year, when energy-related exports were at a high level. Consequently, a decrease will also be seen in the exports of special steels as a whole.

Crude steel demand for this quarter is estimated to be 26.18 million tons, increasing by 1.1% from the previous quarter but decreasing by 6.1% on a year-on-year basis. In this quarter also, despite the continuous moderate recovery of the Japanese economy, it is also expected that demand will be offset by inventories, which are still at a high level.

Steel Demand Prospects for the Second Quarter of FY 2015 (July-September 2015)

(Unit: million tons)
  Total Steel
Ordinary Steel Special Steel
Steel Demand 24.21 19.29 4.92
Year-on-year change (25.07) -3.4% (19.66) -1.9% (5.41) -9.0%
  Change compared with the previous quarter’s forecast (23.52) +3.0% (18.82) +2.5% (4.70) +4.8%
  1) Domestic Demand 15.93 12.59 3.34
  Year-on-year change (16.35) -2.6% (12.85) -2.0% (3.50) -4.5%
  Change compared with the previous quarter’s forecast (15.30) +4.1% (12.14) +3.7% (3.16) +5.8%
  2) Export 8.28 6.70 1.58
  Year-on-year change (8.72) -5.0% (6.81) -1.6% (1.91) -17.2%
  Change compared with the previous quarter’s forecast (8.22)+ 0.8% (6.68) +0.3% (1.54) +2.9%

References:

Crude steel demand equivalent to shipment: 26.18 million tons
Year-on-year change: (27.89 million tons) -6.1%
Change from the previous quarter’s forecast: (25.88 million tons) +1.1%

Ordinary steel: Inventory of makers and wholesalers
Inventory of makers and wholesalers (end-June forecast): 6.73 million tons; inventory turnover: 1.14 months
Inventory for domestic market among the above inventory (end- June forecast): 5.78 million tons; inventory turnover: 1.58 months

  • Note 1: The figures in parentheses 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.

References for Demand Prospects (Second Quarter of FY 2015 (July-September 2015))

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

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
1Q 31,060 19,093 28,067 26,368 27,498 28,081 27,672 25,884
2Q 30,448 24,236 27,357 26,950 27,260 27,737 27,891 26,180
3Q 26,397 26,609 27,665 26,579 25,909 28,139 27,537
4Q 17,596 26,510 27,705 26,566 26,638 27,567 26,745
Total 105,500 96,448 110,793 106,462 107,305 111,524 109,844 52,064

Note 1: The data for the first quarter of FY 2015 is the forecasted result and the data for the second quarter of FY 2015 represents prospects.

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

Sector FY2014 2Q actual consumption FY2015 1Q consumption forecast FY2015 2Q prospects Year-on- year change Change compared with the previous quarter’s forecast
Construction 5,653 5,196 5,520 -2.4% 6.2%
  Civil Engineering 1,793 1,582 1,727 -3.7% 9.2%
  Architecture 3,860 3,614 3,793 -1.7% 5.0%
Manufacturing 7,197 6,944 7,070 -1.8% 1.8%
  Shipbuilding 1,084 1,106 1,106 2.0% 0.0%
  Motor Vehicles 2,779 2,664 2,698 - 2.9% 1.3%
  Industrial Machinery 1,369 1,262 1,335 - 2.5% 5.8%
  Electrical Machinery 758 758 760 0.3% 0.3%
  Secondary Products 585 562 575 - 1.7% 2.3%
  Containers 313 289 290 - 7.3% 0.3%
  Other 309 303 306 - 1.0% 1.0%
Total 12,850 12,140 12,590 - 2.0% 3.7%

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

Release date

July 3, 2015

Division in Charge

Iron and Steel Division, Manufacturing Industries Bureau

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