Japan’s Iron and Steel Federation (JISF) has recently announced that Japan’s steel demand forecast for the year 2019 will be slightly higher than the demand for the ongoing year of 2018.
According to the JISF’s forecasts, next year will not only observe an increase in the country’s domestic steel demand but the exports (external demand) will also rise. Overall, it is expected to exceed the production scale in 2018. In case of crude steel production in FY20 (Apr’19 to Mar’20), we predict that it will be “slightly higher” against ongoing fiscal, which is estimated to be around 105 MnT, JISF said in a statement.
Mr. Koji Kakigi, president of JISF (and also JFE Steel Corporation), commented in a news conference, “There are concerns such as intensifying trade friction between the U.S. and China, but the world economy will generally be solid and the steel demand would continue to grow”.|
In case of domestic demand, construction-related demand is anticipated to increase due to the expansion of public investment activities related to civil engineering works whereas the steel demand from the manufacturing industry is likely to decrease. The reason being the slowdown in industrial machinery segment and plunge in demand for automobiles due to the consumption tax increase from 8% to 10% with effect from Oct’19.
In terms of export demand, increase in demand for steel is predicted based on the forecasts of WSA (World Steel Association) that has predicted the global steel demand to grow by 1.4% to reach 1,681.2 MT.
Although JISF has given a positive outlook for Japan’s steel demand for next year, Mr.Kakigi pointed out that there is a need to “pay close attention” to the U.S.-China trade friction, economic trends in emerging countries such as China and ASEAN, and pointed out the possibility of risk becoming apparent depending on the development of political problems.
Regarding the outlook for next year Mr. Kakigi touched upon the trade negotiations between the United States and China. “If this is not settled, it will have a big impact (also on steel demand). The biggest concern is the stall in the Chinese economy”. He also added that although the direct impact of U.S. tariffs on the Japanese steel industry is minor, changes in the supply chain after the imposition are concerning. However, regarding steel exports of China, (China steelmakers’ situation has changed qualitatively) as expected, exports will not exceed 1 billion tonne” he pointed out.
Leave a Reply