Japan: JFE’s crude steel output rises 14% y-o-y in FY22, FY23 target set at 26 mnt

Japan’s second largest steel producer, JFE Steel, has released its operational and financial results for the fiscal year ended in March 2022.

Highlights

• The company’s crude steel production was recorded at 25.88 mnt in the financial year 2021-22, increasing sharply by 14%. In Q4FY22, the output was higher by 3% to 6.69 mnt compared to Q3FY22.
• Consolidated crude steel output totalled to 27.26 mnt in FY22, up by 14% against 23.96 mnt in the corresponding period last year. In Q4, the output rose marginally by 2% to 7.02 mnt.
• Standalone steel shipments stood at 22.38 mnt in FY22, up by 9% as against 20.49 mnt in CPLY. Shipments rose 5% to 5.92 mnt in Q4 in contrast with 5.63 mnt in Q3.
• Exports ratio in FY22 stood at 45.5% (versus 42.3% in FY21) and 43.6% in Q4.

Automotive production has shown signs of gradual recovery from last year owing to semi-conductor chip shortages, however at a sluggish rate. Activity level in other sectors too remains strong amid the recovery in domestic and overseas economic trends. Therefore, overall steel supply and demand is anticipated to remain robust in 2022.

In the global market, steel demand is expected to show positive trend on recovering economies. Downstream demand from construction sector is likely to recover on peaking out from Covid-19. Automotive too, should show a positive trend on easing of semi-conductors chip shortages. However, the impact on Ukraine post-war with Russia and Covid resurgence especially in China may impact the growth rate.

FY23 plans

Improvement in selling price: JFE plans to accelerate the measures to improve its selling price reflected by raw material costs. The steel major has been able to reflect the current rise in coking coal prices and other materials prices in sales price. Through initiatives such as “shifting focus from quantity to quality” and “overhauling sales prices” in the 7th mid-term business plan, JFE will try to lift sales prices up to the sustainable levels.

Standalone crude steel production to 26 mnt: JFE plans to produce 26 mnt of crude steel in 2022. Currently 8 blast furnaces are operational. Blast furnace no.6 in Chiba is planned to be refitted from September 2022. Furthermore, the steel major is focussing on optimal production in response with the demand.