Japan’s crude steel output projected at 21.2 mnt for Jul-Sep’26, up 6.4% y-o-y

• Semi-finished steel recovery to boost crude steel output growth
• Long steel production remains uneven across product segments

Japan’s Ministry of Economy, Trade and Industry (METI) projects the country’s crude steel production at 21.2 million tonnes (mnt) in the July-September quarter (Q2 FY’26), up by 6.4% y-o-y and 4.2% q-o-q from 20.37 mnt produced in April-June. The forecast marks the second consecutive quarter of y-o-y growth. However, METI said conditions across the key steel-consuming sectors remain largely unchanged, indicating that the overall market recovery is likely to be gradual.

The production estimate is around 1 mnt higher than METI’s previous demand outlook released last month, which had projected crude steel output at 20.18 mnt. The upward revision primarily reflects Nippon Steel’s plan to restore semi-finished steel production at its Muroran Works, resulting in crude steel production increasing at a faster pace than finished steel output.

Finished steel output to rise despite muted demand

Finished steel production is forecast at 18.19 mnt, comprising 14.22 mnt of ordinary steel (up by 3.5% y-o-y) and 3.97 mnt of special steel (up by 0.2% y-o-y). Overall finished steel output is expected to increase 2.8% y-o-y, although production is likely to remain at a subdued level amid largely unchanged demand conditions.

METI said demand trends have remained broadly unchanged and stressed the need to closely monitor the impact of China’s worsening steel supply-demand imbalance and geopolitical tensions in the Middle East, both of which could affect regional steel markets.

For ordinary steel, domestic shipments are projected at 9.1 mnt, while exports are expected at 5.12 mnt. Domestic demand is expected to remain firm, but persistent weakness across ASEAN markets is likely to continue weighing on exports.

Meanwhile, expectations of further domestic steel price increases could prompt some buyers to bring forward purchases, providing temporary support to production despite the unchanged demand environment.

Long steel production outlook diverges by product

Among major long steel products, H-beam production is projected at 800,000 tonnes (t), up by 11.3% q-o-q, while small-section bar production is expected at 1.44 mnt, down by 12.6% q-o-q, reflecting differing demand conditions across product segments.

Construction activity in Japan continues to face delays due to persistent labour shortages and project bottlenecks. As a result, electric arc furnace (EAF) producers, whose main product is small-section bar, are maintaining cautious production schedules despite the projected increase in overall crude steel output.

This article is published as part of a content exchange agreement between Japan Metal Daily and BigMint.