Japan posted a 51-year low in its crude steel output for the calendar year of 2020, which slumped for the sixth consecutive year by another 16.2% on year to about 83.2 million tonnes, according to the latest data from the Japan Iron & Steel Federation (JISF), and this was mainly due to the adverse impact of the COVID-19 outbreak, a JISF official commented on January 25.
The country’s crude steel output in 2020 was only slightly higher than the 82.2 million tonnes for 1969, though the difference lies in that back then Japan’s annual steel production was still an uptrend, Mysteel Global noted. Japan’s annual crude steel production peaked at 120.2 million tonnes in 2007.
The JISF official explained that the country’s crude steel output was already on a shaky foundation in the January-March quarter of 2020 due to Japan’s consumption tax increase effective October 1 2019 and the Sino-U.S. trade friction.
Starting April, the country’s steel demand had been largely compromised by the pandemic, forcing the Japanese mills to cut output, and it have bottomed out since June, or the on-year decline for 2020 could have been more substantial, he added.
Over January-March 2020, Japan produced about 24 million tonnes of crude steel, or down 3.4% on year and the monthly output for June sank about 36% on year to about 5.8 million tonnes, while December output gained 3.6% on month though still down 3.3% on year to about 7.5 million tonnes, according to the JISF data.
A Tokyo-based steel trader expressed satisfaction at the final result, as he had expected the country’s steel output for 2020 to be around 80 million tonnes at the best.
“The faster-than-expected demand recovery from the Japanese auto sector has enabled the domestic mills to ramp up their output at a faster pace,” he added.
Among the total for 2020, steel output from Japan’s integrated mills with blast furnaces accounted for 62.05 million tonnes, which eased for the fourth consecutive year by another 17.3% on year, and the volume from the electric-arc-furnace mills also fell for the second year by another 13% on year to 21.15 million tonnes, though the latter’s ratio in the total rose 0.9 percentage point on year to 25.4%, Mysteel Global noted from the JISF data.
The Tokyo trader admitted, though, that the virus spread has again adding uncertainties to the Japanese economy as well as the sustainability in the steel consumption from the domestic auto and related sectors.
The Japanese automakers are facing the shortage of semiconductors, which may force them to lower their production, and some have already adjusted their auto production downward for January, as reported.
However, “we do not think the country’s steel demand to drop on year for 2021, it is just too hard to predict how strong the recovery will be,” he added.
The latest forecast released by Japan’s Ministry of Economy, Trade and Industry on December 22 suggested that Japan’s crude steel demand in January-March 2021 may grow 7.3% on quarter but down 2.5% on year to 23.5 million tonnes, as reported.
Japan’s Dec finished carbon steel output (selected)
|
Product |
Volume (‘000 tonnes) |
M-o-M |
Y-o-Y |
| Total | 5,085.6 | -1.5% | +4% |
| HRC | 3,028 | -0.9% | -5.1% |
| CRC | 1,291.8 | -0.7% | -0.7% |
| Galvanized sheet | 749.9 | +0.9% | -1.2% |
| Plate | 664.4 | +1.6% | -5.6% |
| Small bar | 606 | -12.3% | -3.2% |
| H-beam | 283.5 | +4.8% | +7% |
| Pipe, Tube | 269.8 | -5.3% | -13.8% |
Source: JISF
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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