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Japan machinery orders rise in April but steel misses out

Machinery orders for private demand received by the 280 manufacturers in Japan surveyed by the government’s Cabinet Office jumped by 5.5% month on month in Apri...

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19 Jun 2023, 11:04 IST
Japan machinery orders rise in April but steel misses out

Machinery orders for private demand received by the 280 manufacturers in Japan surveyed by the government's Cabinet Office jumped by 5.5% month on month in April to the equivalent of Yen 900 billion ($6.4 billion) and marked the first rise in three months, data released on June 15 showed.

But though the overall trend is encouraging, the country's iron and steel industry will find little to cheer about in the statistics.

For starters, the Cabinet Office acknowledged that orders from the manufacturing sector declined and that the overall increase was driven by "active digital-related investment in the non-manufacturing sector." The Office's view of business sentiment was left at "stalling is observed," a judgment that hasn't changed for six months.

The total of orders for private demand from non-manufacturing - excluding "volatile" sectors such as electric power companies - was Yen 488 billion, up by 11% March, the Office's statistics showed.

Orders from the financial and insurance industries, transportation and postal industries, and digital investment such as electronic computers including servers and software - not renowned for their heavy steel usage - were especially buoyant.

On the other hand, orders from the manufacturing sector fell by 3% to Yen 410 billion in March. In addition to a decrease in sales of electrical machinery and commercial machinery, orders from the shipbuilding industry also declined sharply, it noted.

Indeed, orders for the shipbuilding industry plunged by 89.8% from March, the largest decrease of any of the manufacturing sectors the Office surveys.

The dip for shipbuilding should not surprise, however. After the surge of orders for new vessels for exports that the Japanese yards won in March, statistics from the Japan Ship Exporters' Association showed that orders in April were very mediocre - equivalent to 637,900 gross tons in 16 vessels, 66% lower than the total in April last year and 35% down from the March result, as Mysteel Global reported.

The Cabinet Office data also showed that orders received by the iron and steel sector fell by 19.9% from March. However, March had been a strong month for orders for steelmakers - possibly because March was the last month of the fiscal year - with orders jumping by 49.8% from February, the Cabinet Office data showed.

This seems to be in line with the most recent data from the Japan Iron & Steel Federation that showed that in March, domestic and export steel orders jumped by 12.6% from February to 5.23 million tonnes. April order results are yet to be published.

Written by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.

 

19 Jun 2023, 11:04 IST

 

 

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