What Japanese Steel Demand Looks Like in 2018?

Japanese Economy in 2017 vs 2018

The year 2017 saw a gradual expansion in Japanese economy emanating from the growth in overseas market. Although, there is no major improvement in country’s per capita consumption, the recovery in corporate earnings have led to capital investments, pumping the economic growth in the country.

Japan is currently dealing with one of the major economic problems of labour shortage due to shrinking working age population in a rapidly aging society. This labour squeeze can reduce the country’s speed of economic development in the upcoming year of 2018.
However, in order to achieve country’s target of sustainable development, the Japanese government is likely to promote labour-saving capital investments. Also, with the upcoming Olympics in Tokyo in 2020, the Japanese economy is expected to have moderate expansion phase in the year 2018.

Steel Demand and Crude Steel Production in 2017 vs 2018

In the current year 2017, although the country’s steel demand from housing sector remained quite static with little change in market share across construction types or players, demand have been robust from the civil construction sector. With the increased capital investments in 2017, the country’s steel demand from manufacturing sector has also been good.

As per the industry reports, continuing the trend of 2017, Japan’s steel demand in 2018 is likely to increase from non-housing related construction activities due to upcoming Olympics in next two years. Also the country’s automobile sector is getting support from the introduction of new cars in the domestic as well as overseas market, generating positive demand outlook for steel in 2018.

Given the positive demand outlook for steel in 2018, Japan’s crude steel production is likely to slightly increase from the current year of 2017. According to statement released by JISF (Japan Iron and Steel Federation), Japan’s crude steel output in current business year ending March 2017 is likely to be little changed from 10.57 MnT in the previous year of 2016 and the expectations for 2018 are expected to slightly exceed 10.6 MnT.

According to World Steel Association, in time span of Jan-Oct of CY17 Japan’s crude steel output fell slightly by 0.2% to 87.23 MnT against 87.44 MnT in similar time fame of previous year.