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Total orders dropped 0.8% from August levels to 6.05 million tonnes, according to data from the Japan Iron & Steel Federation (JISF).
However, on the year volumes were up by 8%.
Behind the drop was a big fall in orders for exports, which declined by 4.2% to 2.13 million tonnes compared with the previous month. On the year, though, volumes increased by 9.3%.
By contrast, domestic orders continued to remain robust, increasing by 1.2% from August and by 7.3% from year-earlier levels to 3.82 million tonnes.
Orders from dealers in particular showed a strong rebound after many of them shut down for the traditional summer “Obon” break in August, with orders jumping 10.4% from that month to 1.19 million tonnes. Orders were also up 11.8% from year-earlier levels.
There was a similarly healthy picture from the construction sector, where orders rose 0.8% on the month and a very robust 7.8% on the year to 1.01 million tonnes, with the civil engineering segment leaping 16.2% to 234,000 tonnes. Demand from the construction sector is up 8.7% so far this fiscal year beginning April, driven by next year's consumption tax increase and massive reconstruction spending.
By contrast, demand in the manufacturing sector contracted, with orders in the first six months of the fiscal year still down 1.3%.
Orders from manufacturers dropped back 4.5% from August levels to 1.61 million tonnes, although the 3.8% year-on-year rise suggests that the drop was largely due to seasonal factors.
Orders from automakers dropped 10.4% from August but increased by 6.8% year-on-year to 744,000 tonnes.
Industrial machinery and equipment manufacturers' orders fell 5.7% on the month but rose 27.7% on the year to 130,000 tonnes while those from electrical equipment manufacturers were down 8.5% on the month and down 6.3% on the year to 115,000 tonnes.
Orders from the troubled shipbuilding segment dropped 0.8% on the month and 11.7% on the year to 301,000 tonnes.
Weakening exports pulled Japanese steel orders back into negative territory for a second straight month in September despite healthy domestic demand.