Japan Metals Report Q4 2011
Business Monitor International, October 2011, Pages: 67
The earthquake in Japan in March 2011 will have a significant bearing on the country's metals industry for years to come. In the short term, the disruption halted production at several copper and aluminium refineries. It is also set to hurt demand as the economy has now slipped back into recession. However, BMI expect demand and supply of metals to pick up as reconstruction efforts begin. Steel and aluminium are the two sectors most likely to benefit as much of Japan's infrastructure around the epicentre of the earthquake has been damaged. Over the long term, BMI expect production and consumption trends to fall back to low single figures, in line with growth forecasts for the Japanese economy as a whole. Japan remains one of the largest producers and consumers of these metals, but faces a declining share of world output and demand as China and, to a lesser extent, India, rapidly increase production and consumption in most metals.
BMI expect steel production to rebound on the back of increased demand as construction efforts get underway. However, producer margins are likely to remain tight as iron ore and coal prices continue to rise, only some of which can be passed onto the consumer. BMI expect a continuation of the long-term decline in primary aluminium production, with output falling by an annual average of 2.3% per year to 4.20 thousand tonnes (kt) in 2015, from 4.61kt in 2010. BMI expect secondary aluminium, which accounts for the vast majority of the country's refined aluminium output, to grow at an average rate of 5.9%, reaching 1.15mn tonnes (mnt) by 2015, from 870kt in 2010. Consumption growth will be more modest, growing by an average annual rate of 3.6% and reaching 2.42mnt in 2015, up from 2.03mnt in 2010.
BMI have lowered their forecasts for the production and consumption of copper following the earthquake in Japan in March 2011. BMI now expect production to grow by 1.3% in 2011 from 3.8% previously and consumption to grow by 2.1% from 3.7% in their last forecast. BMI have maintained their long-term forecasts as BMI expect demand and supply of refined copper to pick up as reconstruction efforts get underway. Finally, BMI forecast nickel production to reach 217kt in 2015, marking an average annual rate of growth of 5.8% from 164kt in 2010, with Sumitomo Metal Mining leading growth as it increases output at its Niihama refinery, the country's largest, from 41 to 63ktpa in 2013. In addition, BMI forecast consumption growth to average 2.8% per annum from 204kt in 2010 to 178kt in 2015.
Overall, BMI expect production of refined metals to outpace growth in demand, leading to an output surplus over the coming years. Indeed, BMI expect Japan to become a net nickel exporter by 2013, whereas the country has been reliant on imports for the past decade. BMI therefore expect Japan's exports of refined metals to increase, with the primary export market being China – a market BMI expect to remain reliant on imported metals, at least in the short to medium term.
Executive Summary
SWOT Analysis
Japan Political SWOT
Japan Economic SWOT
Japan Business Environment SWOT
Global Market Overview
Steel To Average US$620/tonne In 2012
BMI Steel Forecast
Steel Price Data
Commodities Forecast
Monthly Metals Update
Gold
Copper
Aluminium
Lead
Nickel
Tin
Zinc
Regional Overview
Table: Top 10 Asian Steel Producers, 2009
Forecast Scenario
Nickel: Japan To Become A Net Exporter in 2013
Expansion Plans
Production & Consumption Forecasts
Copper: Output to Pick Up From 2012
Refined Copper Production
Refined Copper Consumption
Aluminium: Production Relatively Unaffected By Earthquake
Primary & Secondary Production
Refined Aluminium Production
Macroeconomic Forecast
Japan – Economic Activity
Competitive Landscape
Steel
Table: Top Japanese Steel Producers, Worldwide Capacity, 2008
Sector Overview
Production and Domestic Sales
Japan Iron and Steel Production ('000 metric tonnes)
Steel Product Output, Jan-Jul 2010
Japan Crude Steel Production ('000 tonnes) -- By Process
Japan Steel Production ('000 tonnes) -- By Category
Japan Steel Production ('000 tonnes)
Japan: Steel Production By Products ('000 tonnes)
Trade
Table: Japan Exports, Jan-Jul 2010
Foreign Ventures
Latest Developments
Financial Results
Table: Output At Sumitomo Steel Works In Japan, 2007 ('000 tonnes)
Table: Crude Steel Production At NSC Steel Works In Japan, 2008 ('000 tonnes)
Table: Crude Steel Production Capacity At JFE Steel Works In Japan ('000 tonnes)
Aluminium
Table: Japan Production Of Aluminium And Fabricated Products, Q208-Q409 ('000 tonnes)
Table: Production of Aluminium and its Fabricated Products 2009 ('000 tonnes)
Table: Aluminium Imports and Exports, 2009 ('000 tonnes)
Table: Japan Demand of Aluminium End-Uses, 2009 ('000 tonnes)
Company Profile
Nippon Steel Corporation
Sumitomo Metal Industries
Global Assumptions, Q4 2011
Table: Global Assumptions, 2009-2015
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2010-2013 (average)
Table: Emerging Market Exchange Rates, 2010-2013 (average)
Developed States
Table: Developed States’ Real GDP Growth, 2010-2013 (% change y-o-y)
Emerging Markets
Table: Emerging Markets’ Real GDP Growth Forecasts, 2010-2013 (% change y-o-y)
BMI Methodology
How We Generate Our Industry Forecasts
Petrochemicals Industry
Cross Checks
- Nippon Steel Corporation
- Sumitomo Metal Industries
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