Posted on 15 Apr 2021
Japan’s crude steel demand including both carbon and special steel for both domestic sales and exports will stay on the recovery path over April-June, though on quarter, it may decline by 1.8% to about 23.24 million tonnes, according to the latest forecast released by Japan’s Ministry of Economy, Trade and Industry (METI) on April 13.
The tonnage is 28.3% higher on year, mainly as the low base over April-June 2020 when the country was battling against the COVID-19, and it is still short of the 26.12 million tonnes for April-June 2019, Mysteel Global notes.
In terms of finished steel, the demand will be up 20.6% on year but down 2.1% on quarter, according to METI.
“Slowdown on quarter is within the expectation, though we tell the steady recovery in the overall steel demand via the continuing improvement in the operational rates among the end-users,” a Tokyo-based steel trader commented.
Besides, April-June is the first quarter of a fiscal year when the government will finalize the budgets, so both the civil engineering projects and manufacturers will slow down the pace on quarter after an acceleration in January-March, the last quarter of the fiscal year to present a rather satisfying financial results, he added.
Japan’s finished steel exports both for carbon and special steel, however, will be the only sectors that will score gains both on quarter and on year, as overseas demand will pick up further with the economic recoveries in the foreign countries, METI highlighted.
As for domestic market, demand for carbon steel from the key sectors such as the construction sector, for example, may drop 2.3% on quarter or fall 1.5% on year to about 4.55 million tonnes, though the adverse impact will be partially offset by the consumption from the manufacturers, which may drop 4.1% on quarter but will gain 25% on year to 5.96 million tonnes, as suggested by the METI data.
A Tokyo-based flat steel trader also expected higher exports over April-June, believing the Japanese integrated mills would prefer to increase exports, as overseas steel prices have been rising faster than in the domestic market, though, “they will still be prioritizing on fulfilling the flats supplies to their long-term contract customers, so they will not be able to export as much as they’d like to,” he added.
The latest available data from the Japan Iron & Steel Federation suggested the traders’ comment, as for January-February, Japan exported about 1.8 million tonnes of HRCs, down 13.2% on year, despite the robust demand from abroad, as the domestic steel mills had been busy delivering limited output first to the long-term customers, as reported.
Hot-rolled coil (HRCs), being Japan’s top steel product for exports, accounts for about 40% of the country’s total finished steel exports.
Japan's finished steel demand forecast (Apr-Jun)
|
Finished products total |
Carbon steel |
Special steel |
|
|
Total (million tonnes) |
20.61 |
16.18 |
4.43 |
|
Y-o-Y |
+20.6% |
+13.6% |
+55.6% |
|
Q-o-Q |
-2.1% |
-2.1% |
-1.8% |
|
For domestic (million tonnes) |
13.69 |
10.51 |
3.18 |
|
Y-o-Y |
+20.3% |
+11.9% |
+59.9% |
|
Q-o-Q |
-3.3% |
-3.3% |
-3.5% |
|
For export (million tonnes) |
6.92 |
5.67 |
1.25 |
|
Y-o-Y |
+21.1% |
+16.7% |
+45.7% |
|
Q-o-Q |
+0.5% |
+0.1% |
+2.5% |
Source: METI
Source:Mysteel Global
