For June, Japan’s domestic carbon steel sales had declined for the 10th month by 8% on year to some 2.97 million tonnes, or marking the second month to below 3 million tonnes, according to the new data released by Japan Iron & Steel Federation (JISF) on August 16. Market sources shared that Japanese manufacturers’ stagnated operations had slowed their steel consumption.
Nevertheless, the decline in sales narrowed, because manufacturers had expected the disruption by the COVID-induced delay in component deliveries to improve in summer and they had been gradually preparing for it, which led sales in June to rise on month, sources observed.
Japan’s domestic carbon steel sales over January-June approximated 18.39 million tonnes, down 4.6% on year, the JISF data showed.
“We heard the delivery of components including semi-conductors to manufacturers had improved slowly and some manufacturers including automakers could have been lifting their output gradually since July. So sales to manufactures might be higher last month,” a Tokyo-based steel trader shared.
“On the other hand, Japan’s COVID confirmed cases have been surging again since mid-July, and some manufacturers had to shut their operations because of the labor shortage. So we couldn’t be certain about steel consumption amid remaining uncertainties,” he warned.
For June, Japan’s carbon steel export sales declined by 16.1% on year but 8.9% higher on month to 1.65 million tonnes.
A second trader in Tokyo observed that Japan’s overall exports were still slow, but the on-month rise had to do with the fact that integrated mills had allocated more for exports amid stagnated demand from domestic buyers.
By product, sales of hot-rolled coil (HRC) totaled 1.45 million tonnes in June, down 19.5% on year but 1.8% higher on month, while plate sales rose 14.5% on year and 12.8% on month to 801,000 tonnes.
The second trader attributed the decline in HRC sales partially to mills’ limited supply to adjust stocks in response to slower consumption by manufacturers, and the rise in plate sales was mainly because of shipbuilders’ higher operations with more backlog orders of new vessels.
“We expect plate demand to stay firm. But plate producers have reined in their plate output capacity in recent years, so they may not be able to lift plate sales by a large degree,” the second trader added.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply