Japan’s steel exports witnessed a significant decline in February 2024 to 2.492 million tonnes (mnt), falling below 2.5 mnt for the first time since January 2023. This marks a 4.2% decrease compared to the same month last year.
Several factors contributed to this slump. Firstly, maintenance shutdowns at Japanese steel mills limited production capacity. Secondly, a sense of market saturation emerged in Asia, leading to a cautious approach during business negotiations.
The situation is further compounded by the upcoming low demand period in the Islamic world due to Ramadan and the rainy season. This, coupled with persistently weak domestic demand in China, have resulted in aggressive pricing by Chinese steelmakers.
The softening demand is reflected in the spot market for iron ore as well. Prices have plummeted from nearly $140/t CFR China at the start of the year to the $100/t level in March, 2024, prompting overseas customers to adopt a wait-and-see approach.
The regional breakdown of exports revealed a concerning trend. ASEAN, a key destination, saw a decline of 8.8% to 778,000 tonnes (t), marking the fourth consecutive month of decrease and the first time falling below 800,000 t since January 2022. Exports to South Korea and China also witnessed significant drops of 15.2% and 8.8% respectively.
Outside Asia, there were mixed results. While exports to the EU and the U.S. fell by 13.7% and 11.4% respectively, exports to the Middle East saw a positive growth of 29.8%.
Note: This article has been written in accordance with an article exchange agreement between Japan Metal daily and BigMint.