Posted on 07 Jul 2014
Japan's crude steel output is expected to rise 0.9 percent
in July-September from a year earlier on solid demand from shipbuilders and
infrastructure projects, the government said on Wednesday.
The increase follows an estimated 0.5-percent fall in the
April-June quarter when a hike in sales tax crimped appetite for steel, said
the Ministry of Economy, Trade and Industry (METI).
"Manufacturing appetite is likely to hold steady as
shipbuilder demand is seen recovering and automobile sales may get a boost in
the summer bonus season," Ryuichi Yamashita, director of the ministry's
iron and steel division, told a news conference.
"Construction demand will drop in reaction to rushed
demand ahead of the sales tax hike and due to labour shortages and higher
labour costs," he added.
Steel output for the July-September quarter is projected to
rise to 27.96 million tonnes from 27.72 million tonnes a year earlier. That is
up slightly from 27.95 million tonnes in the previous quarter.
Investors have been closely watching the impact on the
economy of the sales tax hike that went into effect on April 1, with top
officials at steelmakers saying that any effects had been mild.
"For April and May, the effect from the tax hike was
smaller than expected," said Hiroya Kawasaki, President of Kobe Steel Ltd,
Japan's No.3 steelmaker.
"We still need to be cautious, but given an expected
recovery of demand after July, Japan's overall crude steel output for this
fiscal year may exceed the steel federation's prediction," he said.
Japan's crude steel output rose to its highest in six years
at 111 million tonnes in the year ended March 31 on robust construction demand,
but the Japan Iron and Steel Federation has predicted it will weaken slightly
this fiscal year due to the sales tax hike.
Demand for steel products, including for export, is expected
to fall 2.9 percent to 24.25 million tonnes in July-September compared with a
year earlier, the ministry said, citing an industry survey.
Exports are seen declining 4.2 percent to 8.21 million
tonnes, according to the ministry.
"Due to continuing oversupply in Asia, the export
environment will remain tough for Japanese steelmakers," METI's Yamashita
said.
