- Anti-dumping probe in EU stalls HRC exports
- Fading Chinese demand, fresh supplies main headwinds in H2
Nippon Steel and JFE Steel’s export ratios (by value) for April-June 2025 dropped to 40% and 39.9%, respectively, down 2-3 percentage points from January-March 2025. A stronger yen, sluggish global steel demand, and increased trade sanctions hindered export negotiations for both companies.
Nippon Steel’s figures include the merged operations of Nippon Steel Stainless Steel and Nippon Steel Pipe, making direct y-o-y comparisons less consistent. On a simple basis, exports fell three points from the previous quarter and four points from the same period last year. Hot-rolled coil (HRC), a key export product, saw negotiations stall due to anti-dumping investigations in the EU and South Korea, as well as a safeguard probe in India.
JFE’s export ratio dropped two points from the prior quarter and 0.7 points y-o-y, dipping below 40% for the first time since first quarter 2019, when production challenges affected output.
Currency appreciation, price pressures weigh on performance
A significant shift in the exchange rate and declining global prices contributed to the drop in export ratios. The currency averaged JPY 145 per US dollar in 1Q FY2025, compared to around JPY 155 in the same period last year. This appreciation reduced export values. Additionally, overseas HRC prices have fallen by approximately $100/t y-o-y, with heightened Chinese export activity pushing general-purpose steel prices below $500/t in some regions – the lowest since July 2020, post-COVID shock.
Signs of recovery in global prices
Market sentiment has improved slightly since July. In China, following a Central Financial and Economic Commission directive against excessive competition in steel, auto, and other sectors, steel prices rose on expectations of production cuts. On 12 August, Shanghai Futures Exchange HRC (October delivery) prices neared RMB 3,500/t ($490/t), up almost RMB 500/t from late June lows.
The uptrend extended to Southeast Asia, with Vietnam’s Hoa Phat raising HRC offers by $15 to around $515/t CIF and Formosa Ha Tinh Steel increasing prices by $10 to $510/t – reversing last month’s cuts.
Outlook
In July-September 2025, Nippon Steel targets a 40% export ratio and JFE 42%, with easing yen appreciation expected to stabilise performance. However, H2 CY25 faces headwinds from added supply via Hoa Phat’s new mill, fading Chinese stimulus-driven demand, and South Korea’s planned temporary anti-dumping measures on Japanese HRC, signalling continued volatility despite recent price gains.
Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and BigMint.
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