#90-DF-9 "Japan's Steel Supply and Demand Trends" 
         (Fumihiro Goto and Kazutoshi Todo, February 1990.) 

A WHOLE SENTENCE

ABSTRACT

    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 l 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.