Japan’s crude steel output including both carbon and special steel is estimated to grow to about 21.8 million tonnes over October-December, or up 14.9% on quarter, according to a release by Japan’s Ministry of Economy, Trade and Industry (METI) on November 10, indicating the continuing demand improvement.
The estimated output, however, will still be 7.8% lower on year due to the lingering negative impact of the COVID-19, according to a METI official, based on a survey among the three blast-furnaces producers and about 60 mini-mills and special steel producers, which will also be 3.3% higher on the METI’s demand forecast on October 7.
With the projected steel output for October-December, Japan’s steel production for the whole 2020 may approximate 83 million tonnes, down 16.3% on year, which will be a 51-year low and also lower than the 87.5 million tonnes for 2009, Mysteel Global notes.
“Actual steel production for auto-related customers may be higher than planned, as the automakers have been gradually and steadily raising their output, the METI official explained, “but demand from some other sectors such as machinery remains unclear, making it hard for the steel mills to define a targeted volume,” he added.
Japan’s Oct-Dec finished steel production plan (METI survey)
| Total | Carbon steel | Special steel | |
| Total (million t) | 19.21 | 15.47 | 3.73 |
| Y-o-Y | -7.0% | -3.8% | -18.2% |
| Q-o-Q | +13.5% | +11.9% | +20.7% |
| – Domestic sales (million t) | 13.04 | 10.29 | 2.76 |
| Y-o-Y | -6.2% | -3.8% | -14.3% |
| Q-o-Q | +17.5% | +16.0% | +23.4% |
| – Exports (million t) | 6.16 | 5.18 | 0.97 |
| Y-o-Y | -8.5% | -3.7% | -27.5% |
| Q-o-Q | +5.8% | +4.4% | +13.5% |
A sales official from an integrated mill in Tokyo agreed that auto sector has been the leading positive factor for higher steel output in Japan.
“Construction steel production has been set higher for October-December, but this has factored in the demand spree on the possible price rises, which is hard to sustain into the next quarter,” he noted.
Other than flat steel, the Japanese steelmakers aim to produce about 1.9 million tonnes of small dia bars over October-December, up 3% on quarter but down 5.2% on year, and about 900,000 tonnes of H-beams, up 8.2% on quarter and 6.9% higher on year, according to the survey.
As for finished steel, the production for exports in the last quarter of 2020 may be up 5.8% on quarter but down 8.5% on year to about 6.2 million tonnes, and the lower on-quarter increases in exports than domestic sales are mainly due to the remaining sluggish demand from Southeast Asia as well as the Japanese mills’ prioritizing domestic sales, the sales official explained.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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