Japan’s machinery orders for all industrial uses rose 52% on year to Yen 429 billion ($3.1 billion) in value during May, or the third consecutive month with an on-year rise, according to the latest release by Japan Society of Industrial Machinery Manufacturers. Market sources believed that steel demand from the machinery sector will improve, though uncertainty remains.
The May result was also 13.4% higher on month. Sources said inquiries from manufacturers had been active and more orders are expected to be placed.
Among the total, orders from Japanese customers approximated Yen 240.8 billion, up 52.3% on year and 16% higher on month, among which those from domestic manufacturers were at Yen 151 billion, surging by 107.2% on year to mark the seventh consecutive month with an on-year rise.
Meanwhile, those orders from non-manufacturers were at Yen 48 billion, up 13% on year and making for the first rise after two months of declines, though they were still down 6.2% on month.
“Manufacturers have been active to invest in new machinery and those from non-manufacturers have finally started showing some signs of improvement. But we’re worried that the seventh wave of COVID-19 in Japan will slow down their business activities again, which may reduce the steel consumption from the machinery sector,” a Tokyo-based steel trader warned.
On July 13, about 95,000 COVID-19 cases were confirmed across Japan – the first time for the country to report over 90,000 cases in a single day over five months. Among the total, about 17,000 cases were confirmed in Tokyo – the second day to exceed 10,000 cases, Mysteel Global noted.
As for Japan’s industrial machinery exports in May, the volume rose 51.5% on year and 8.9% higher on month. “The depreciation of Yen was one of the key factors that had supported Japanese export orders to rise in the month,” a sales official from a machinery maker in Tokyo said.
Meanwhile, over January-April, Japan’s carbon steel and special steel orders placed by domestic industrial machinery manufacturers totaled 1.01 million tonnes, down 6.7% on year, Mysteel Global calculated based on the latest data from Japan Iron & Steel Federation.
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.
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