Japan's May domestic carbon steel sales down for ninth month

For May, Japan's domestic carbon steel sales had decreased for the ninth month by 10% on year to about 2.9 million tonnes, according to the data released by Japan Iron & Steel Federation (JISF) on July 19. A JISF official commented that slower sales to manufacturers, especially to the auto sector had continued pressuring overall domestic sales to decrease.

The decline might be partially due to the uncertainties amid the ongoing Russia-Ukraine conflict, but also because of logistics disruptions caused by the COVID lockdown in Shanghai over April-May, which had resulted in the delay in component deliveries, he said.

"We expect manufacturers, mainly the auto sector to lift operations in the second half of the current fiscal year (September-March 2023). So steel orders will increase, though we're uncertain about the time," the official said.

By product, sales of H-beams increased by 9.7% on year and 2.4% on month to 296,806 tonnes in May, and those of plates rose by 3.7% on year but down 22.1% on month to 709,676 tonnes, while those of hot-rolled coils as the largest sales item declined by 22% on year and 20% on month to 1.43 million tonnes, the JISF data showed.

A Tokyo-based steel trader observed that large-scale construction projects such as manufacturing plants had been active and more will be planned in the second half, and general contractors had been active to secure H-beams, and higher plate sales mainly had to do with shipbuilders who had been lifting operations with increasing new vessel backlog orders.

"The decline in HRC was partially due to the decline in exports that month, because overseas market prices had dropped and buyers were not active to secure the material from Japanese suppliers," he added.

In May, Japan's carbon steel export sales declined by 15.9% on year and 28.1% lower on month to 1.52 million tonnes, the first on-year decline after three months of rises, the data showed.

HRC is Japan's key item for exports, accounting nearly half of the country's HRC output, Mysteel Global notes.

Written by Yoko Manabe, yoko.manabe@mysteel.com

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