- Uncertainty surrounding US tariffs clouds outlook
- Domestic auto, construction sectors under pressure
JMD: Japan’s crude steel output is expected to remain largely unchanged in the third quarter of 2025, according to production plans released by the Ministry of Economy, Trade and Industry (METI). The forecast of 20.62 million tonnes (mnt) for July-September represents a marginal 0.1% year-on-year (y-o-y) increase, marking the first quarterly rise since late 2023.
Despite the slight increase, steelmakers are maintaining low production levels due to persistently weak domestic and international demand. The outlook is further complicated by uncertainty surrounding potential impacts from new US tariff policies.
Demand trends
Domestic demand remains sluggish across sectors. The construction industry continues to face delays due to labour shortages and rising costs, while the automotive sector, despite recovering production systems, is seeing subdued actual demand. This has led steelmakers to adopt a cautious approach to their output planning.
Product-wise output
Total steel product output for the quarter is projected at 18.10 mnt, a 3% increase from the previous quarter but still at a low overall level. This comprises 14.12 mnt of ordinary steel and 3.98 mnt of special steel.
In the ordinary steel segment, 8.91 mnt is allocated for domestic consumption, up by 6.1% y-o-y, while 5.21 mnt is designated for exports. The 8.7% y-o-y decline in export demand is attributed to weakening market conditions, particularly in, Southeast Asia.
For the July-September quarter, the production of key construction steels is set to decline like H-beam output is forecast at 650,000 tonnes (t), a decrease of approximately 70,000 t from the previous quarter. The planned production is also down roughly 80,000 t y-o-y, reflecting the ongoing weak demand from the construction sector. Moreover, small bar (rebar) production is expected to total 1.58 mnt, a drop of about 80,000 t compared to the April-June period.
Outlook
Japan’s crude steel market is expected to remain flat. Moreover, production in July-September is projected at a low level due to weak demand from key domestic sectors like construction and automotive, while exports are also declining. Overall, the market is expected to remain subdued with no significant recovery in sight.
Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and BigMint.
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