Japan’s carbon steel exports fall 6% y-o-y in CY’20

Japan’s carbon steel exports declined for a fifth straight year last year, sliding by 5.9% from 2019 to reach 20.93 million tonnes, according to the latest data released by the Japan Iron & Steel Federation on January 29. A JISF official explained that the drop was mainly from the negative impact of the COVID-19 outbreak, and that the quick pace of economic recovery in China and its need for steel had prevented a much steeper fall.

The slowdown in shipments during H1 last year occurred mainly because demand from overseas customers had stagnated because of the virus outbreak, the JISF official noted, while the decline in the second half was because the Japanese steel producers had less availability for export, after banking some blast furnaces and putting priority on supplying the domestic auto sector.

Japanese carbon steel output during the year reached just 59.25 million tonnes, down 13.5% on year, JISF data show. The drop in export volume was smaller (compared to that for output) thanks to firm demand from Chinese customers for Japanese steel, the JISF official said. “Without China’s quicker recovery, the size in the fall in Japanese exports might have been similar to that for output,” he told Mysteel Global.

By product, exports of most types of carbon steel declined on year but those of hot-rolled coils (HRC) – traditionally the Japanese steel producers’ largest export item – rose 2% on year. Shipments of sections were also 6.2% higher, along with those of tinplate and tin free steel (TFS) by 10.6% and 14.4% respectively.

The JISF official explained that HRC exports to most of the major overseas markets including South Korea and Thailand were lower on-year. However, here again, China stood out, with HRC shipments there surging by 13.8% higher on year to 1.24 million tonnes, with the result that overall HRC exports rose.

Meanwhile, exports of sections such as beams, channels and angles rose in 2020 – chiefly because those in 2019 were comparatively low – while Japanese exports of tinplate and TFS were a rare beneficiary of the virus contagion. More people forced to stay home because of the virus outbreak saw demand for canned food soar last year, boosting tinplate and TFS demand from canmakers as a result.

Japan’s 2020 carbon steel exports by product (selected)

Source: JISF

In December alone, Japan’s carbon steel exports declined by 9% on year but were up 4.3% from November at 1.63 million tonnes. Among the December total, HRC exports reached 796,377 tonnes, down 10.2% on year but up 6.1% on month, according to the JISF data.

A trader in Tokyo expected that exports last month would show an increase when the official statistics are published, because the integrated mills have more production availability after restarting blast furnaces – two furnaces in November and one in January. “But to what extent the integrated mills can lift their exports will depend on the domestic demand recovery,” he said. “But we can’t predict it now because of the second state of emergency over the virus (issued from January 8 to February 7). We still don’t know how seriously it will impact domestic economic activity,” he added.

Meanwhile, Japan’s carbon steel imports during 2020 totalled 3.98 million tonnes, down 18.2% on year. “That drop equals the size of the domestic demand decrease,” the JISF official noted. Imports of carbon steel in December reached 342,304 tonnes, down 16% on year but 4.8% higher on month, the latest data showed.

Written by Yoko Manabe, yoko.manabe@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.