Japan's construction steel demand expected to remain strong until early 2022
Latest Japanese construction-related data suggest the demand of construction steel may stay sound until early next year despite the remaining uncertainties amid the new w...
Latest Japanese construction-related data suggest the demand of construction steel may stay sound until early next year despite the remaining uncertainties amid the new wave of the COVID-19 outbreak, and Japanese steel mills will probably need to ramp up their production for steady supplies, according to market sources.
The statistics released on August 31 by Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT), showed that newly-launched building projects nationwide including housing and non-housing totalled 10.66 million sq m in July, up 9.9% on year, making it the fifth consecutive month with on-year increase.
Among the total, non-timber buildings also grew on year for the fifth straight month by 8.4% to 5.9 million sq m with steel-framed buildings accounting for 3.7 million sq m, up 4.5% on year, and reinforced concrete buildings totaling 2.02 million sq m, up 12.7% on year, according to MLIT data.
Steel-framed buildings consume more beams and sections while reinforced concrete buildings consume more rebars, Mysteel Global understands.
"Actual steel orders for new buildings usually starts about six months after the groundbreaking, and the latest data suggest that Japan's construction steel demand has been in a booming period and will last probably until early 2022," a construction steel trader in Tokyo explained.
He, added, though, that some projects in the pipeline are under the review now due to the intensifying uncertainties with the rising COVID-19 cases in Japan. "some projects may be postponed or canceled if the situation deteriorates, so we will need to watch the market closely," he warned.
A sales official from a mini-mill in Tokyo confirmed that inquiries for construction steel such as H-beams, rebars and plates have been rising steadily recently, and he expected demand from civil engineering in October-December to grow, resulting in higher demand for construction steel while worsening tightness in supply.
"It happened before that some construction projects were forced to delay the progress because of shortage of construction steel, so to prevent that from reemerging, buyers may need to be ready to pay more for timely deliveries of steel," he pointed out.
Japan's construction steel prices have been rising steady, and as of September 3, SS400 grade 200x100mm H-beam is transacted at Yen 102,000-103,000/tonne ($928-937/t), and SD205A 16-25mm rebar at Yen 90,000-91,000/t, both in Tokyo and both up Yen 1,000/t on week or Yen 2,000/t higher on month, sources confirmed.
Written by Yoko Manabe, email@example.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.