September 28, 2012 / 6:06 AM / 5 years ago

UPDATE 1-Japan Q4 crude steel demand seen down 0.2 pct y/r

* Q4 crude steel demand seen at 26.54 mln tonnes, down 3.6 pct from Q3

* Carbon steel exports seen down 7.2 pct from Q3 at 6.4 mln T

* Demand from car sector down 5.5 pct from Q3 at 2.8 mln T (Adds details)

TOKYO, Sept 28 (Reuters) - Demand for crude steel in Japan is expected to fall 0.2 percent in the fourth quarter from a year earlier, hit by a decline in car production after government subsidies ended, the trade ministry said on Friday.

Export growth is also waning as a result of the global economic slowdown and a supply glut in Asia’s steel market, while reconstruction demand in response to last year’s Japanese earthquake has yet to be seen, the ministry said.

Demand for crude steel in Japan, the world’s No.2 producer of the metal, is seen at 26.54 million tonnes in the October-December quarter, the ministry estimated, based on a government survey of steelmakers and looking at estimated inventory levels at the end of September.

Fourth-quarter crude steel output is down 3.6 percent from the preceding quarter.

“There are some risk factors like production uncertainty in China, but we don’t see a deterioration in Japan’s steel production in the near future, with steady demand from the construction, engineering and some manufacturing sectors underpinning demand,” Ryuichi Yamashita, director at the Ministry of Economy and Trade and Industry, told reporters.

The ministry expects exports of carbon steel to rise 9.4 percent to 6.4 million tonnes during the fourth quarter from a year ago, when severe flooding in Thailand ruptured Japanese manufacturers’ supply chains, sharply curtailing steel exports from Japan.

That would be down 7.2 percent from 6.9 million tonnes exported in this year’s July-September period.

Demand from the car industry is projected to fall 8.9 percent year on year to 2.8 million tonnes in the fourth quarter, and total domestic demand for carbon steel is seen flat at 18.63 million tonnes, which would be 3.3 percent below July-September’s demand.

Reporting by Yuko Inoue; Editing by Daniel Magnowski

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