Japan's Steel Demand to Decline as Economy Cools, Ministry Says

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Sep 2008

Crude-steel demand in Japan, Asia's largest economy, will probably drop for the first time in 12 quarters in the final three months of the year as rising inventories lead manufacturers to cut output, the government said. Total steel demand for the three months to Dec. 31 may fall 1.7 percent to 30.34 million tons from a year ago, the Ministry of Economy, Trade and Industry said today in a statement. That's the first decline since the October-to-December period in 2005. Japan is on the verge of a recession after shrinking in the second quarter, and Bank of Japan Deputy Governor Kiyohiko Nishimura said today there's ``considerable uncertainty'' about the outlook. The ministry's projection didn't factor in the possible impact of the U.S. financial crisis, it said.
Steel demand from Japan's manufacturers will probably fall 0.9 percent in the fiscal third quarter, led by a 5.2 percent decline in demand from carmakers, the statement said.
Shipbuilders will need 6.7 percent more of the alloy, and industrial machinery makers will use 2 percent more, the statement said. Builders' demand will rise 8.3 percent from a year earlier, when stricter building-permit rules had reduced demand, it said. Tokyo-based JFE Holdings Inc., the world's third-largest steelmaker, dropped 5.8 percent to end at 3,430 yen on the Tokyo Stock Exchange. Nippon Steel Corp., the second biggest worldwide, fell 3.7 percent to 413 yen.

Source: Bloomberg