Japan’s apparent steel consumption is anticipated to recover by 6.5% on year to about 56 million tonnes for 2021 with the gradual return of the domestic economy to the normal track and rebound in demand from the downstream industries, Kazuo Mike Fujisawa, a senior official from Japan’s JFE Steel Corporation, shared at the SEAISI 50th Anniversary e-Conference & Exhibition over June 17-22.
The demand, thus, will reverse from a 6.8% on-year drop for 2020, mainly from the downstream industries such as automobile, machinery and construction, and for 2022, the country’s steel consumption may rise another 5% on year to 58.8 million tonnes, though still lower than the 63.2 million tonnes for 2019, he quoted the data from Japan Iron and Steel Federation.
“Japan have had fewer COVID-19 cases than U.S. and EU, but the Japanese economy has been significantly impacted by the interrupted overseas economic activities,” he said, adding that steel demand from the privately-owned enterprises, investment from the privately-owned firms into non-resident projects and exports have all been compromised.
Japan’s economic growth is expected to recover to the pre-COVID-19 level around the last quarter of this year, and its Gross Domestic Product (GDP), may grow 3.3% on year for 2021, 2.5% on year for 2022, and then the on-year growths may gradually slow to 0.7% on year over 2023-2026, he quoted the forecast by the International Monetary Fund in April.
For the first quarter of 2021, Japan’s GDP still contracted on year by 3.9% on year, or continuing with the decline from 2020, when it fell 4.8% on year, he added.
It is encouraging, though, that its industrial production index has returned to the pre-COVID level since the first quarter, and its automobile production has been recovering rapidly with robust sales domestically and overseas, he pointed out, though the recovery has not been even, as the country’s service sector has stayed subdued.
He warned, though, Japan’s economy and steel industry are still facing multiple challenges in the coming months with the ongoing battle against the COVID-19, and the domestic steel mills will be tested by the fiercer global competition, better overseas demand while comparatively weak domestic market, carbon neutral deadline by 2050, and the research and development on new digital technologies in steelmaking.
JFE Steel Corp is Japan’s second largest steel mill after Nippon Steel, and in FY20 (over April 2020-March 2021), its crude steel production reached 24 million tonnes with over 80% being flats and balance as bars, shapes, pipes and slabs.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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