Japan’s crude steel production is estimated to decline by 6.8% y-o-y to 22.55 million tonnes (mnt) over the October-December quarter (Q4CY’22), as per a new release from the Ministry of Economy, Trade and Industry (METI).
Meanwhile, the same is expected to rise a marginal 0.5% on a q-o-q basis as compared to 22.44 mnt in the July-September on the back of recovery in automobile production.
“It is expected that the demand recovery trend will continue. However, METI will closely monitor the risk factors associated with the supply chains of the major industries,” said Daisuke Matsuno, head of the Metals Division of the Ministry of Economy, Trade and Industry.
He also spoke of resilient price movements that would continue in H2CY’22, adding that there were risk factors and that it was necessary to be vigilant against downside risks due to parts supply constraints, the situation in Russia-Ukraine, and foreign exchange trends.
Steel demand forecast
According to the latest forecast, steel demand for Q4 is estimated to increase by 2.5% q-o-q to 20.65 mnt, while, the same will be down by 3.8% from the same period last year. Out of the total steel production, demand for ordinary steel is likely to go up by 1.8% q-o-q to 11.39 mnt and exports by 1.4% q-o-q to 5.02 mnt.
Domestic consumption of ordinary steel from industries like automobiles, construction and shipbuilding have registered an increase on a yearly basis. Therefore, steel demand is expected to remain firm in this quarter.
Demand from various sectors
Automobile sales are likely to rise from last year despite supply constraints of semi-conductors and other parts.
Also, demand from shipbuilding will increase against last year on the back of recovery in the construction sector. However, the rate of increase was slow down due to soaring construction costs and labour shortages.
Moreover, consumption from the construction sector is divided into two segments:
(i) construction (down 2.1% y-o-y)
(ii) civil engineering (down 10.1% y-o-y)
Note: This article has been published in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.
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