Posted on 07 Apr 2016
Japan’s crude steel output for April-June will fall 2.4 percent from a year earlier to the lowest for the quarter in seven years, the government said.
That would come as the latest in a series of signals of economic slowdown, clouding the outlook for Prime Minister Shinzo Abe’s drive to reflate the economy and spurring calls for more monetary stimulus.
The Ministry of Economy, Trade and Industry (METI) estimated crude steel output would sink to 25.24 million tonnes in April-June, the lowest output for the quarter since 2009 when steel demand was hit hard by the global financial crisis. Against the previous quarter, output is seen falling 3.1 percent, it said, citing an industry survey.
Demand for steel from the construction sector is forecast to slide 3.1 percent from a year earlier, while demand from manufacturing is seen dropping 1.7 percent for the quarter.
“Construction demand for distribution warehouses is fairly solid, but demand for civil engineering and new shops is sluggish,” Takanari Yamashita, director of METI’s iron and steel division, told a news conference.
“Automobile and electronics segments are likely to see a pick up in demand, but industrial machinery is expected to stay under pressure,” he said.
Slack steel demand elsewhere in Asia and anti-dumping steps taken by many countries will drag on exports, while slow demand for energy-related steel products such as drilling pipes in the wake of plunging oil prices will add to pressure, he said.
Demand for steel products, including those for export, is forecast to sink 3.8 percent to 22.91 million tonnes in April-June compared with a year earlier. Steel product exports are expected to decline 6.3 percent.
Asked when the ministry sees a recovery in demand, Yamashita said construction appetite would likely pick up from summer given an expected increase in the number of projects related to the Tokyo Olympics in 2020.
“Although it’s not definitive, we expect and hope to see a gradual recovery in demand in and after summer,” he said, also citing higher capital expenditure that could bolster industrial machinery demand.
Crude steel output for the financial year ended March 31 is estimated at 104.44 million tonnes, marking the lowest since the 2009 year, according to the ministry.
