Japan's Steel Supply and Demand Trends

Steel, as an important basic material, has a close relationship with the economic structure of Japan. This paper will attempt to analyze as quantitatively as possible the mid-and-long term trends of Japan's steel supply and demand under the enormous changes of her economy including the growth of information and service industries, and the drastic yen appreciation after 1985.

Following the introductory statements of Chapters 1 and 2, Chapter 3 discusses the methodology used to forecast demand for steel. Here we have developed a new model that uses an explicit approach adopting input-output analysis method and incorporating the idea of a relationship between steel demand and economic structure, which traditional forecasting models (steel GNP intensity, SWIP index, etc.) have not done.

In Chapter 4, we use this model to predict what Japan's steel supply and demand will be around the year 1995. Interviews were also conducted with representatives of such steel-using industries as construction, automobiles, and electrical machinery in order to verify the prediction.

In conclusion, It is forecasted that domestic steel demand in Japan will fall over a mid-and-long term perspective because of the changes in the industrial structure. Net exports will also fall because of the strengthening of international competitiveness in newly developing steel countries.

The prediction by our model is basically supported by the interviews with the major steel-using industries. More specifically, the model is an adequate one when looking at the relationship between steel supply and demand, and the domestic economy. One of the remaining problems is the forecasting of exports and imports, which requires that a world steel trade model be developed.