steelmakers are less pessimistic about their business
environment for the second quarter than they were at the start
of the year, according to a Bank of Japan survey.
The Japanese business sentiment
index came in at negative 13 for the second quarter compared
with negative 30 at the start of the first quarter.
"There are still worries,"
an executive at one steelmaker said. "We are concerned
about too much steel capacity in Asia and a lot of domestic
demand is being moved overseas by manufacturers such as
automakers. Also, some sectors, especially the shipbuilding
industry, face very poor business conditions."
conditions were worse than the survey had predicted, with the
actual reading coming in at negative 38, well below the
forecast of negative 30.
"The improvement in demand has
taken longer than we had expected," one industry executive
said. Nevertheless, demand from many sectors now appears to be
picking up, he added. But the fact that the reading among
steelmakers remains firmly in negative territory shows that
demand, while picking up, continues to remain sluggish.
Smaller steelmakers were more
pessimistic about their market than larger steelmakers, the
survey showed, but shipbuilders have overtaken steelmakers as
the most pessimistic in the manufacturing sector. "They are
getting almost no new orders, and that impacts steel demand,"
another executive said.
But apart from shipbuilders, many big manufacturers said
their sentiment has improved for the first time in three
quarters on the weaker yen and rising share prices.
A version of this article was first published by AMM sister
publication Steel First.