Economic & Steel Market Development in Japan

Transcription

1 1 Economic & Steel Market Development in Japan 68 th OECD Steel Committee Paris May 6-7, 2010 The Japan Iron & Steel Federation

2 2 Macro-economic overview Steel Supply and Demand v v v Steel Production Major Steel-Consuming Industries Steel Exports & Imports Outlook for 2010 Conclusion

3 The Japanese Economy in Annualized GDP growth rate contracted significantly in to 5.2%. Despite the current recovery, the Japanese economy remains lackluster due to sluggish capital expenditures, high unemployment. The unemployment rate slightly improved, but it will remain high in Final demand category 2007 The ratio to GDP % GDP growth rates in Japan (unit: %) Unemployment Rate of Japan Q 2Q 3Q 4Q Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Source: Statistics Bureau, Ministry of Internal Affairs and Communications The ratio to GDP Q 2Q 3Q 4Q The ratio to GDP Real GDP % % % Private Consumption % % % Residential investment 9.6 3% % % Private capital investment % % % Public investment 7.4 4% % % Exports % % % Imports % % % GDP Deflator Source:Cabinet Office Note:The growth rates in the table are shown changes from the previous quarter in real terms. The figures for the 4th quarter of are basis of the 2nd preliminary estimates.

4 IIP continue to improve since Feb. The index in Feb 2010 decreased 0.6 points from the previous month to All indexes had returned to almost the pre-crisis level Indexes for IIP, Shipments and Inventory(2005=100 Seasonally adjusted) Production index Inventory index Inventory ratio index Shipment index 系列 Source: Ministry of Economy, Trade and Industry

5 Steel Supply and Demand in (Crude steel production) Crude steel production fell 26.3% to million tons in. Crude steel production increased 50.7% to million tons in Q. 5 (million tons) ,32 million tons (2nd highest) Crude Steel Production(calender years) 87,53 million tons ,20 million tons (All-time high) (,000 tons) 32,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 Quarterly Crude Steel Production 30,835 17,596 26, (%) Year-on-Year change unit: % Year-on-Year change Source: Ministry of Economy, Trade and Industry

6 Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan (Steel Demand by the consuming sectors) 6 Index of the steel consuming sectors are recovering from 4Q. Government stimulus measures contribute the rapid recovery. % Figure 5. Automobile Industry (sales, production, year-on-year basis) % Industrial Machinery % Jan 2007 Year-on-year rate of general machine IIP Apr Jul O ct Jan 2008 Apr Jul O ct Jan Electric Machinery Apr Jul O ct Jan Production of four-wheel car Domestic sale (excluding imported cars) Export of finished cars Source: Ministry of Economy, Trade and Industry Jan 2007 Year-on-year rate of heavy machine IIP Apr Jul O ct Jan 2008 Apr Jul O ct Jan Apr Jul O ct Jan 2010

7 (Steel Exports) Steel exports decreased 9.7% to million tons in, but it started recovering with strong demand in mainly Asia in 3Q. The primary users of Japanese steel exported to Asia are the local factories of Japanese companies (automobiles, home appliances, etc.) and re-rollers (selling slabs, hot-rolled coils and other products). 7 (Million tons) a) Total Steel exports(calender years) 34.4 (Million tons) b) Total steel exports (Quarterly) Q 2Q 3Q 4Q 08.1Q 2Q 3Q 4Q 09.1Q 2Q 3Q 4Q Source: Ministry of Finance, JISF (unit:,000 tons) Steel Exports by Destination China South Korea Taiwan ASEAN10 Others ,342 (17.2%) 9,591 (26.0%) 3,599 (9.8%) 8,978 (24.4%) 8,342 (22.6%) 36, ,670 (17.5%) 9,282 (24.3%) 3,703 (9.7%) 10,383 (27.2%) 8,090 (21.2%) 38,128 6,468 (18.8%) 9,830 (28.5%) 3,370 (9.8%) 7,747 (22.5%) 7,027 (20.4%) 34,442 Source: Ministry of Finance

8 (Steel Imports) 8 Steel imports dropped 42.2% to 4.61 million tons in. The drop were in cold-rolled sheets and coils, ferroalloys and many other product categories. Steel Imports by Category (thousand tons) (million tons) Japan's Steel Imports a) Total steel imports (Calendar years) (million tons) b) Ordinary steel imports (Calendar years) YoY change (%) Pct. Pig iron 1, (69.3) 6.4 Ferroalloys 2,143 2,221 1,029 (53.7) 22.3 Ordinary steel ingots/semi-finished (65.9) 0.9 Specialty steel ingots/semi-finished (61.3) 0.1 Ordinary steel 3,799 3,706 2,495 (32.7) 54.1 Flat-rolled products 2,790 3,291 2,064 (37.3) 44.7 Heavy/medium plates (40.9) 2.9 Hot-rolled sheets 1,172 1,640 1,023 (37.7) 22.2 Cold-rolled sheets and coils (40.1) 12.6 Galvanized sheets (28.0) 5.6 Tin plate/tfs Other metallic-coated sheets (39.8) 0.9 Electrical sheets (25.1) 0.3 Long products Rails/Steel sheet pilings (22.7) 0.3 Sections (12.1) 1.6 Bars Wire rods Tubular products Specialty steel (11.4) 3.9 Secondary steel products/others (24.2) 12.3 Total 8,664 7,973 4,612 (42.2) : Imports from Korea 2,881 2,844 1,915 (32.7) 41.5 : Imports from China 1,995 1, (55.6) 18.1 : Imports from Taiw an (26.7) 13.6

9 Macroeconomic Outlook For 2010, prediction of GDP growth rate (Government = 1.4%, private-sector research institutions =1.6%). All index except public investments are expected to be stable, or to increase. For 2011, 19 research institutions forecast the average growth of 1.9%. 9 Economic Forecasts by the Japanese Government (Jan. 10) and 23 Major Private-sector Research Institutes (as of Feb. 10) (Unit: YoY %) FY FY 2010 FY 2011 Real GDP Gov t forecast 23 research institutes 23 research institutes 19 research institutes Gov t Avg. Max. Min. forecast Avg. Max. Min. Avg. Max. Min. (2.6) (2.2) (2.1) (2.4) Private-sector final consumption (0.1) Private-sector housing investment (16.9) (18.4) (16.0) (19.1) (5.1) Private-sector corporate capex (16.5) (15.8) (15.3) (18.4) (1.2) (1.7) Public-sector fixed capital formation (9.5) (10.6) (4.4) (22.0) (5.2) (1.0) (10.0) Export (14.4) (9.9) 12.2 (11.4) Import (11.1) (11.3) 8.5 (12.6) (2.8) Mining and manufacturing (11.2) (9.6) (6.7) (10.1) (1.5) Consumer price index (1.6) (1.6) (1.4) (1.7) (0.8) (0.9) (0.2) (1.3) (0.2) 0.3 (0.7)

10 Outlook for Domestic Demand 10 Demand for steel is expected to be the same as in due to the outlook for a weak recovery in activity in steel-consuming industries Automobile New housing starts Production Non-residential construction starts (floor area) Shipbuilding Starts (Keels Laid) Electrical Machinery Industrial Machinery

11 Outlook for Steel Supply and Demand / Apparent consumption (crude steel equivalent) ( Unit:,000 tons) 83,067 55, % Exports (crude steel equivalent) 40,751 35, Imports (crude steel equivalent) 5,079 3, Crude steel production 118,739 87,

12 Conclusion Although some severe aspects remain in the employment situation, the economy in 2010 is expected to pick up as corporate profits improve, reflecting improvement in overseas economies and the effects of policy measures including the Emergency Economic Measures. Steel demand is recovering, however, there is a risk of downturn due to raw materials price surge, an ending of the government economic measures. The environment of the Japanese steel industry remains challenging. The world economy and the steel industry face the critical phase at the traces of sustainable recovery. It is important that every country maintain an open environment for trade and investment.