Japan’s Ministry of Economy, Trade and Industry (METI) forecasts that the country’s crude steel output in the Jan-Mar’22 quarter will reach 23.77 million tonnes (mnt), increasing slightly from the corresponding period last year
However, this is the first time since January-March, 2009, when crude steel output will go below the levels of 24 mnt.
In comparison with the Oct-Dec’21 quarter, production volumes will decrease slightly by 1.8%.
Steel demand in Japan as well as globally is improving but, for the time being, there remains a downside risk as automobile production is impacted due to a shortage in chip supply.
Finished steel production likely to increase y-o-y
Japan’s finished steel production in the Jan-Mar’22 quarter will increase by 2.9% y-o-y to 21.02 mnt, of which ordinary steel output is estimated to be at 16.49 mnt, up 4.5% y-o-y. The volumes meant for domestic supply account for 11.06 mnt, down 9.7% y-o-y and those for exports at 5.43 mnt, down 4.7% y-o-y.
However, production from the BF-route is expected to increase by about 150,000 t compared to the previous quarter while EAF-route production will decrease by 160,000 t q-o-q. The decrease in EAF production could be because of sluggish inquiries from the construction sector alongside the seasonal factors.
Steel demand from the major consuming sectors like shipbuilding, industrial machinery, and construction machinery is expected to remain firm.
Exports
BF-route steel exports are expected to decrease by about 110,000 t while those of EAF-route may fall by 50,000 t compared to the previous quarter.
H-beams and small steel bars output
The output of H-beams is expected to be at 950,000 t, up 1% y-o-y and that of steel bars, at 1.84 mnt, down 10% y-o-y, as per METI forecasts.
Annual production forecast
METI forecasts that the country’s crude steel production will touch 96.39 mnt in the current fiscal (Apr’21-Mar’22), increasing by 13 mnt or 16% compared to last fiscal. Notably, this will be the first increase in five years since FY’16-17.
Although it will be below the 100-mnt for the third consecutive year, the domestic real production capacity is estimated to be around 100 mnt, and the operating rate will continue to exceed 90%.
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