Japanese steel orders flat in May as domestic demand offsets exports drop

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Total steel orders amounted to 5.95 million tonnes, according to figures from the Japan Iron & Steel Federation.

The figure came on the back of a rise in domestic orders, which increased by 3.9% from year-earlier levels, off-setting a continuing decline in export orders.

Steel orders from the domestic manufacturing sector rose by 2.1% to 1.64 million tonnes.

The year-on-year increase reflects the recovery in the Japanese economy over the past twelve months, largely due to a weaker yen and the economic stimulus policies of the Shinzo Abe government.

Orders from the auto industry, the largest consumer of steel, totalled 756,000 tonnes, dropping just 0.1% on the year.

Demand from the shipbuilding sector continues to show further signs of being on a path to recovery, although figures from this segment are highly volatile and subject to big monthly swings.

Orders reached 324,000 tonnes in April, a rise of 10.1% from year-earlier levels.

The figures mean that orders from the sector have posted a year-on-year increase every month so far this year.

Orders from industrial machinery and equipment manufacturers decreased by 1.1% year-on-year to 137,000 tonnes. Those from electrical machinery and equipment manufacturers were up 14.7%, at 135,000 tonnes.

Orders from the construction sector also increased. They rose by 10.5% on the year to 1.03 million tonnes as orders from the building segment rose 8.2% to 577,000 tonnes and those from the civil engineering segment rose 12.9% to 214,000 tonnes.

Orders from dealers, an estimated 70% of which are supposedly consumed in the construction industry, edged up by 0.7% from year-earlier levels to 1.09 million tonnes.

Exports, meanwhile, continued to decline, with volumes 5.8% lower than in the corresponding period a year earlier, at 2.11 million tonnes.

In terms of major products, orders for hot rolled strip dropped by 0.6% year-on-year to 1.74 million tonnes, while those for galvanized sheet rose by 2.1% to 921,000 tonnes.

Heavy plate orders fell by 1.7% from a year earlier to 831,000 tonnes, while orders for bars rose by 4.7% to 685,000 tonnes.