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Steel Demand Prospects for the First Quarter of FY 2016 (April-June 2016)

Total steel demand for the first quarter of FY 2016 (April-June 2016) is estimated to be 22.91 million tons, a 2.7% decrease from the previous quarter, and a 3.8% 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 decrease for civil engineering from the previous quarter due to seasonal factors. On a year-on-year basis, demand in civil engineering will decrease. Regarding demand in architecture, demand in housing construction will be lower than that in the same period of the previous year, while demand in non-housing construction is expected to steadily increase, including that in construction of distribution facilities. However, demand in the overall construction sector will decrease since the demand is expected be lower than that in the same period of the previous year due to weak demand for stores and other factors.
    • Manufacturing:
      Steel demand in the manufacturing sector will decrease from the previous quarter due to seasonal factors (a quarter following a fiscal yearend) in the motor vehicle and electrical machinery sectors. On a year-on-year basis, although demand in motor vehicle sectors will be higher than that in the same period of the previous year as a result of recovery from the negative repercussions triggered by the consumption tax hike, demand in industrial machinery will decrease because the demand for construction machinery will decrease due to the negative influence of emissions regulations and sluggish automobile demand in China, ASEAN, and other countries. Thus, demand will slightly decrease across the manufacturing sector overall.
  • Steel exports:
    Steel exports will decrease slightly from the previous quarter and also decrease on a year-on-year basis. As the demand in emerging countries in Asia and other regions has been sluggish and the relaxation of supply and demand continues on a global basis, steel exports will decrease due to the impact of trade actions, the continuous sluggishness of energy-related demand, and other factors.

Crude steel demand for this quarter is estimated to be 25.24 million tons, decreasing by 3.1% from the previous quarter and decreasing by 2.4% on a year-on-year basis.

Steel Demand Prospects for the First Quarter of FY2016 (April–June 2016)

(Unit: million tons)
Total Steel
Ordinary Steel Special Steel
Steel Demand 22.91 18.36 4.55
Year-on-year change (23.83) - 3.8% (19.15) - 4.1% (4.67) - 2.7%
Change compared with the previous quarter’s forecast (23.54) - 2.7% (18.90) - 2.9% (4.64) - 2.0%
1) Domestic Demand 15.04 11.96 3.08
Year-on-year change (15.42) - 2.5% (12.24) - 2.3% (3.18) - 3.3%
Change compared with the previous quarter’s forecast (15.53) - 3.2% (12.40) - 3.5% (3.13) - 1.6%
2) Export 7.87 6.40 1.47
Year-on-year change (8.40) - 6.3% (6.91) - 7.4% (1.49) - 1.4%
Change compared with the previous quarter’s forecast (8.01) - 1.8% (6.50) - 1.5% (1.51) - 2.8%

References:

Crude steel demand equivalent to shipment: 25.24 million tons

Year-on-year change: (25.85 million tons) −2.4%
Change from the previous quarter’s forecast: (26.04 million tons) −3.1%

Ordinary steel: Inventory of makers and wholesalers

Inventory of makers and wholesalers (end-March forecast): 6.60 million tons; Inventory turnover: 1.11 months
Inventory for domestic market among the above inventory (end- March forecast): 5.66 million tons; Inventory turnover: 1.50 months

Note: 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)

Reference for Demand Prospects (First Quarter of FY2016 (April-June 2016))

1. Trends in Crude Steel Production (Unit: thousand tons)
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
1Q 26,368 27,498 28,081 27,672 25,855 25,235
2Q 26,950 27,260 27,737 27,891 26,213
3Q 26,579 25,909 28,139 27,537 26,338
4Q 26,566 26,638 27,567 26,745 26,039
Total 106,462 107,305 111,524 109,844 104,444

Note 1) The data for the fourth quarter of FY2015 is the forecast result and the data for the first quarter of FY2016 represents prospects.

2. Ordinary Steel: Sector-by-Sector Domestic Consumption (Unit: thousand tons)
Sector FY 2015 1Q Actual consumption FY 2015 4Q Consumption Forecast FY 2016 1Q Prospects
Year-on- Year Change Change Compared with the Previous Quarter’s Forecast
・Construction 5,373 5,417 5,209 - 3.1% - 3.8%
Civil Engineering 1,580 1,853 1,546 - 2.2% - 16.6%
Architecture 3,793 3,564 3,663 - 3.4% 2.8%
・Manufacturing 6,867 6,983 6,751 - 1.7% - 3.3%
Shipbuilding 1,097 1,058 1,074 - 2.1% 1.5%
Motor Vehicles 2,645 2,800 2,668 0.9% - 4.7%
Industrial Machinery 1,253 1,188 1,155 - 7.8% - 2.8%
Electrical Machinery 718 776 718 0.0% - 7.5%
Secondary Products 567 570 558 - 1.6% - 2.1%
Containers 287 287 276 - 3.8% - 3.8%
Other 300 304 302 0.7% - 0.7%
Total 12,240 12,400 11,960 - 2.3% - 3.5%

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

Trends in Crude Steel Production
(Unit: thousand tons)
(forecasted results) 1Q
(consumption forecast) 4Q

Release date

April 5, 2016

Division in Charge

Iron and Steel Division, Manufacturing Industries Bureau

Related Information

Data Reports
Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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