Japan's crude steel production in the third quarter of 2009 is expected to see the highest quarterly increase because of inventory adjustments, improvement in exports and high domestic demand.
According to the Ministry of Economy and International Trade, the crude steel production in Japan is likely to be the highest in July-September 2009, as reported by Reuters.
Japan's crude steel output for the third quarter of 2009 is projected to rise 14.3% to 21.77 Million Tonnes against the preceding quarter (April-June 2009). However, the production will likely to be lesser by 28.5% from the previous year's same quarter (July-September 2008).
The prospective uptrend in steel production is said to be supported by depleting stocks and higher public spending. Among the steel consuming industries in Japan, automotive demand for steel products is expected to grow enormously in the third quarter of 2009 against the second quarter owing to inventory replenishment.
Besides, the construction sector will create demand for steel products during July-September 2009 thanks to public works projects which will see advanced executions.
The Japanese exports of steel products is anticipated to surge in the third quarter of 2009 over the second quarter of 2009 primarily due to the increased shipments to the Asian countries where economic recovery has created some demand for steel products. Inventory adjustments to create more space for new products have also received great importance by some leading steel consuming sectors.
The Ministry of Economy and International Trade has forecasted that the steel production will climb up to 17.57 Million Tonnes in July-September 2009, an increase of 10.2% from April-June but lesser by 20.4% from July-September 2008.
After taking all important things into consideration, Japan will need an estimated 20,710,000 Tonnes of steel products in July-September 2009, higher than 2,190,000 Tonnes required in the same quarter a year earlier.
According to a Research Analyst at RNCOS, "While the projections of steel production for the third quarter of 2009 seem quite impressive, long term outlook is still cloudy. The strong growth in production is unlikely to sustain in the fourth quarter of 2009 since stock adjustments might be completed by the end of third quarter."
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