According to the latest reports, Nippon Steel & Sumikin Bussan Corp (NSSBC), the trading arm of Japan’s largest integrated mill Nippon Steel & Sumitomo Metal Corp has purchased a 10.54% stake in construction steel processor QH Plus Corp in Vietnam.
QH Plus Corporation has a rebar processing, steel production and coil center in Ho Chi Minh City and also distributes steel products.
NSSBC has been a long-term supplier of QH Plus Corp and with its stake acquisition, it plans to supply base materials such as plate to QH for steel frame production and get involved in the domestic distribution of steel products.
As per the market experts, Vietnam’s consumption of construction steel is expected to continue its growth as Vietnam has recently undergone reforms to create more accessible markets for private sector investment in construction through PPPs (Public-Private Partnership). These reforms include an initiative where foreign investors are allowed to acquire land and hold a majority stake in a commercial or residential project.
On the other hand, Japanese steel demand from the construction sector is falling amid lack of large scale project development and is anticipated to fall because of declining birth rates which means lower per capita consumption in future. This is making Japanese companies to look out for business expansion opportunities in growing countries.
Japan’s steel demand dips by 3% in Jul’18
According to the latest JISF (Japanese Iron & Steel Federation) statistics for the month of Jul’18, Japan’s steel demand in July fell 2.9% on weaker demand from the construction and manufacturing segments.
Total construction steel demand decreased by 4.9% to 920,000 tonnes. This includes civil engineering works demand of 187,000 tonnes, which is a decrease of 7% year on year. Building demand was at 526,000 tonnes, a decrease of 9.9% compared with the same period last year.
Non-residential buildings accounted for the largest percentage fall in steel demand at 12.5% year on year to 371,000 tonnes. Residential building demand fell 3.1% to 154,000 tonnes.
Demand from the manufacturing sector fell 7.2% to 1.52 MnT in July during the same period. Demand from automotive makers fell 13.6% to 677,000 tonnes, while demand from marine equipment makers increased 10.6% year on year to 309,000 tonnes. The country’s total domestic steel consumption fell 2.9% year on year to 3.57 million tonnes.
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