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Steel Demand Prospects for the Second Quarter of FY 2016 (July-September 2016)

Total steel demand for the second quarter of FY 2016 (July-September 2016) is estimated to be 24.04 million tons, a 4.2% increase from the previous quarter, and a 0.2% 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, demand in the overall construction sector will be flat since demand in the architecture sector is expected to show steady performance in construction of distribution facilities, while a decrease will be seen in new store openings due to the low private consumption in non-housing construction, and demand in the civil engineering sector will be higher than that in the same period of the previous year due to the expected acceleration of budget implementation.
  • Manufacturing:
    • Steel demand in the manufacturing sector will increase from the previous quarter due to seasonal factors in the motor vehicle and industrial machinery sectors as well as recovery in production from the shutdown of automobile plants affected by the earthquakes that occurred in Kumamoto Prefecture and other factors. On a year-on-year basis, demand in the manufacturing sector overall will remain the same since demand in automobiles 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, while demand for construction machinery will decrease due to the negative influence of emissions regulations.
  • Steel exports:
    • On a year-on-year basis, as the demand in emerging countries in Asia or other regions has been sluggish and the relaxation of supply and demand continues on a global basis, steel exports will decrease slightly, while they will increase slightly from the previous quarter due to the differences in demand among energy-related business.

Crude steel demand for this quarter is estimated to be 26.36 million tons, increasing by 0.9% from the previous quarter and by 0.6% on a year-on-year basis.

Steel Demand Prospects for the Second Quarter of FY2016 (July–September 2016)
(Unit: million tons)
  Total Steel
  Ordinary Steel Special Steel
Steel Demand 24.04 19.26 4.78
  Year-on-year change (24.08) -0.2% (19.43) -0.9% (4.65) +2.7%
Change compared with the previous quarter’s forecast (23.07) +4.2% (18.44) +4.4% (4.63) +3.2%
1) Domestic Demand 15.79 12.61 3.18
Year-on-year change (15.69) +0.6% (12.51) +0.8% (3.18) -0.1%
Change compared with the previous quarter’s forecast (14.93) +5.8% (11.84) +6.5% (3.09) +2.9%
2) Export 8.25 6.65 1.60
Year-on-year change (8.39) -1.6% (6.92) -3.8% (1.47) +8.8%
Change compared with the previous quarter’s forecast (8.14) +1.3% (6.60) +0.8% (1.54) +3.7%

References:

  • Crude steel demand equivalent to shipment: 26.36 million tons
    • Year-on-year change: (26.20 million tons) +0.6%
    • Change from the previous quarter’s forecast: (26.13 million tons) +0.9%
  • Ordinary steel: Inventory of makers and wholesalers
    • Inventory of makers and wholesalers (end-June forecast): 6.62 million tons;
    • Inventory turnover: 1.13 months
    • Inventory for domestic market among the above inventory (end-June forecast): 5.70 million tons; Inventory turnover: 1.55 months
  • Notes:
    • The figures in parenthesis in the table above show the quantity for the same period of the previous year or the previous quarter’s forecast for comparison purposes (in millions of tons)
    • 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 FY2016 (July-September 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 25,858 26,127
2Q 26,950 27,260 27,737 27,891 26,197 26,355
3Q 26,579 25,909 28,139 27,537 26,335  
4Q 26,566 26,638 27,567 26,745 25,839  
Total 106,462 107,305 111,524 109,844 104,229  

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

2. Ordinary Steel: Sector-by-Sector Domestic Consumption (Unit: thousand tons)
Sector FY 2015 2Q Actual consumption FY 2016 1Q Consumption Forecast FY 2016 2Q Prospects  
Year-on- Year Change Change Compared with the Previous Quarter’s Forecast
- Construction 5,605 5,231 5,651 0.8% 8.0%
  Civil Engineering 1,670 1,597 1,741 4.3% 9.0%
  Architecture 3,935 3,634 3,910 -0.6% 7.6%
- Manufacturing 6,905 6,609 6,959 0.8% 5.3%
  Shipbuilding 1,102 1,066 1,073 -2.6% 0.7%
  Motor Vehicles 2,670 2,568 2,765 3.6% 7.7%
  Industrial Machinery 1,223 1,134 1,207 -1.3% 6.4%
  Electrical Machinery 742 717 750 1.1% 4.6%
  Secondary Products 556 554 571 2.7% 3.1%
  Containers 303 276 290 -4.3% 5.1%
  Other 309 294 303 -1.9% 3.1%
Total 12,510 11,840 12,610 0.8% 6.5%

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

Release date

July 7, 2016

Division in Charge

Metal Industries Division, Manufacturing Industries Bureau

Related Information

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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