Japan’s Nippon Steel and Sumitomo Metal Corporation (NSSMC) has revised down its forecasts of domestic Japanese steel demand over January-June 2015, Kallanish observes. A slightly higher forecast for special steel demand was outweighed by a fall in demand from construction and from some manufacturing sectors, its data show.

In its report for the October-December 2014 quarter NSSMC noted that Japan’s steel demand continued to be hit by the increase in consumption tax on 1 April 2014. A second such increase was indefinitely delayed late last year, when prime minister Shinzo Abe won a snap election which was prompted by news that the country had officially entered a recession in Q3.

Japanese domestic steel demand will hit 32.22 million tonnes over January-June 2015, down from 33.34mt a year earlier but up from 32.06mt over July-December 2014, NSSMC says. The steelmaker had previously forecast 32.78mt of demand over the period.

A weak construction sector is the main cause of the revision. Construction steel demand over January-June is expected to be 11.42mt, down from a previous forecast of 11.77mt and from demand of 11.85mt a year earlier. Automotive demand was also revised downwards to 5.56mt, down from 5.84mt a year earlier.

Special steel demand was revised upwards slightly to 6.49mt, but was still down from 6.7mt in January-June 2014.