In September, Japan’s total carbon steel finished steel sales including domestic market and exports declined on month for the first time since February, down 1.7% or 7.4% lower on year to around 4.85 million tonnes, according to the data released by the Japan Iron & Steel Federation (JISF) on November 16, mainly due to less consumption by the auto sector, market sources commented.
September had also been the second consecutive month so far in 2021 with the monthly sales volume below 5 million tonnes, though the total steel sales over January-September still posted an 8.3% on-year gain to about 45.43 million tonnes, Mysteel Global calculated based on the official data.
On-month decline in September sales had been rather unusual, as in normal years, the volume has been higher than August due to more public holidays in the latter, market sources agreed.
Most probably, it was a result of fewer steel orders from the auto sector, according to a Tokyo-based steel trader, though he did not expect this to “continue”.
Japan’s automakers had cut down on their production since August with delays in auto components deliveries from Southeast Asian suppliers with the ongoing COVID-19, and Toyota Motor, the Japan’s largest automaker, for example, cut its domestic vehicle output by 30-40% over September-October, but the production has been recovering since November, as reported.
As for carbon steel demand from Japan’s other manufacturers, it has been firm, and consumption from the domestic shipbuilders has been improving with the rises in new vessel orders, their backlog orders are still below the target, but the degree had narrowed to 0.1% from 17.3% in August.
“This will probably soon be reflected in orders for steel and plate supply tightness, thus, may worsen,” the trader warned. About 85-90% of carbon steel consumption in shipbuilding is about heavy plates, Mysteel Global understands.
For September, Japan’s total plate sales at home and exports accounted for 793,551 tonnes, up 6.3% on year and 21.5% higher on month, according to the JISF data, among which the Japanese shipbuilders usually consume about 30%, Mysteel Global notes.
As for Japan’s carbon steel exports in September, the volume declined on year for the first time after five consecutive months of rises on year, and the total volume added up to 16.59 million tonnes over January-September, down 24.5% on year.
“Inquiries from overseas buyers in September had been active in general, so the decline must have to do with demand from the overseas auto sector with lower auto manufacturing, as the Japanese mills could have allocated more tonnage for exports with lower domestic sales,” a second trader in Tokyo explained.
Japan’s HRC sales both at home and exports approximated 1.49 million tonnes, down 9.6% on year and 12.4% lower on month, according to the JISF data, and the product is the top export item, accounting for 25-30% of the total HRC output by the Japanese mills.
~Written by Yoko Manabe, yoko.manabe@mysteel.com
~This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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