- Japan’s crude steel production planned at 20.72 mnt in Apr-Jun
- Construction steel demand continues to weaken amid labour shortages and high costs
Japan Metal Daily: Japan’s crude steel production is expected to increase marginally in the April-June quarter, marking the first year-on-year rise in 10 quarters, according to production plans released by the Ministry of Economy, Trade and Industry (METI) and reported by Japan Metal Daily.
Crude steel output is planned at 20.72 million tonnes (mnt) for the quarter, up 2.8% y-o-y. While this represents a modest improvement from the prolonged downturn seen since late 2023, production levels remain historically weak, equivalent to an annualised pace of around 83 mnt.
METI indicated that there has been no major change in the overall demand environment, with domestic and export sales broadly in line with the previous fiscal year. However, the ministry flagged continued risks from instability in the Middle East, worsening steel supply-demand imbalance in China, and uncertainty surrounding US tariff policy.
The latest production plan also exceeds METI’s early-April crude steel forecast of 20 mnt by more than 700,000 tonnes, suggesting mills are expecting slightly better operating conditions than initially anticipated.
Ordinary steel output rises, exports remain weak
Ordinary steel production for the quarter is planned at 13.97 mnt, up 1.4% y-o-y, while special steel output is expected to reach 3.89 mnt, increasing 2.4% y-o-y. Total steel production is planned at 17.86 mnt.
Domestic shipments are expected at 11.95 mnt, while exports are projected at 5.9 mnt. The outlook suggests domestic sales may improve marginally, but export demand remains under pressure. The divergence reflects weak overseas demand conditions and continued pressure from excess Chinese steel supply in export markets.
Construction steel demand remains sluggish
Production plans for construction steel products remain cautious despite the broader increase in crude steel output. H-beam production is planned at 750,000 tonnes, up around 10,000 tonnes from the previous quarter and 30,000 tonnes higher y-o-y. Small bar output is projected at 1.61 mnt, increasing by around 140,000 tonnes q-o-q, though still down 50,000 tonnes y-o-y.
Demand for construction steel continues to remain weak amid labour shortages, delayed project execution, and elevated material costs. As a result, electric furnace mills and other producers are maintaining a cautious production stance despite the slight improvement in broader steel output.
Outlook
Japan’s steel sector is showing early signs of stabilisation after an extended period of weak production, but the recovery remains limited. While crude steel output is expected to rise y-o-y for the first time since late 2023, domestic and export demand conditions remain subdued. Construction steel demand continues to face structural pressure, while external risks linked to China, geopolitics, and trade policy continue to weigh on sentiment. As a result, the planned increase in production appears to reflect stabilisation at low operating levels rather than the beginning of a sustained recovery.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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