Tokyo — The Shipbuilders Association of Japan has reduced its steel demand forecast for the 2018-19 fiscal year (April-March) due to a slump in new building orders.
The association now says its members will require 3.11 million mt of ordinary carbon steel in fiscal 2018-19, down 3% year on year and 6.8% less than it forecast in April.
SAJ compiled its forecast from a survey of members, which represent about 80% of Japan's shipbuilding capacity.
SAJ officials were unavailable for comment Friday.
A Tokyo-based trader said he was not surprised by the downward adjustment because the number of orders received by shipbuilders to date this year has been lower than expected.
"Their backlog orders have been decreasing; they will have to slow down their construction speed to have stable operations," he said.
Vessel orders received by Japanese shipbuilders for export totaled 2.15 million gross tons over April-July, down 32.2% on year. Their backlog stood at 501 vessels at end July, equating to 25.54 million gross tons, down 7.3% on year in gross tons.
Another Tokyo-based trader said domestic ship plate consumption was expected to decrease but exports of ship plate were expected to remain firm.
Overall plate demand also remains firm in Japan from the construction and machinery sectors, the source said.
"We expect plate producers will be kept busy even if consumption by domestic shipbuilders slows down," he added.
Ordinary carbon steel orders booked by Japanese shipbuilders totaled 902,522 mt over April-June, down 4.5% on year, latest Japan Iron & Steel Federation data showed.
