Japan’s three integrated mills, Nippon Steel, JFE Steel and Kobe Steel, expected their exports over July-September to decline with softened overseas market prices, though Japanese Yen has been weakened, according to the latest financial results released by the companies.
Nippon Steel and JFE Steel estimated that their respective export ratio in the current quarter (by non-consolidated basis) would decline by 7 points and 6.5 points on quarter. Though Kobe Steel did not reveal its forecast for July-September export ratio, sources expected it to decline on quarter because sales for exports are lower.
A Tokyo-based trader attributed the decline partially to active exports over April-June, because integrated mills had ample availability for exports amid slower domestic demand due to stagnated operations by domestic manufacturers including the auto sector with the delay in component deliveries, while the depreciation of Yen made Japanese mills become more active to export.
“Overseas market prices had declined since May, Japanese mills could no longer enjoy the currency depreciation, and actual export negotiations have become stalled. But Japanese mills plan to lift production in the current quarter because they expect domestic demand to improve,” he explained.
The three integrated mills plan to produce approximated 16.91 million tonnes of crude steel over July-September, up 1.2% on quarter but still 15.4% lower on year, Mysteel Global calculated based on the company releases.
Meanwhile, the three companies are estimated to produce about 67.5 million tonnes of crude steel in the current fiscal year (April 2022-March 2023), down 14.5% on year, Mysteel Global calculated based on their latest forecasts.
A sales official from an integrated mill in Tokyo shared that actual output in the current year could be lower than the estimation due to remaining uncertainties, such as the speed of recovery in Japanese auto output, the impact from the ongoing Russia-Ukraine conflict, and the latest wave of COVID-19 outbreaks.
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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