Japan’s crude steel output including both carbon and special steel is estimated to decline 4.8% on year to 22.93 million tonnes over July-September, according to the new release by Japan’s Ministry of Economy, Trade and Industry (METI) on August 9.
The latest production estimation – through a survey conducted by METI among Japanese steel producers – is the third consecutive quarter with an on-year decline and remained mostly flat from April-June, down merely 0.2% on quarter, the data showed.
The mills’ production plan was also 2.4% lower than the forecast by METI on July 13.
A Tokyo-based steel trader observed that Japanese automakers had been adjusting their output lower because of the delay in component deliveries, but it’s seen improving slowly, so Japan’s overall steel demand is increasing on quarter though it’s still lower on year.
“Japanese integrated mills will have difficulties to export more, because it is the low season for steel demand among Asian countries, and overseas market prices have softened and become unattractive. So the decline in Japanese steelmakers’ output plan is mainly due to slower exports,” he explained.
Japanese steel mills plan to produce 12.97 million tonnes of finished steel for domestic sales in the current quarter, down 4.9% on year but 2.4% higher on quarter, while those for exports at 6.53 million tonnes, down 11.8% on year and 8.8% lower from April-June.
A sales official from an integrated mill in Tokyo warned that Japanese mills might have to adjust their production plans lower in the current quarter due to the country’s latest wave of COVID outbreaks.
“Because Japan’s COVID-19 confirmed cases are at high levels and are disrupting some business activities, so we hear that some manufacturers are being forced to slow down their operations because of the labor shortage. And we have to monitor the movement very cautiously,” he said.
Meanwhile, METI only reveals the specific production volume for two steel products, Mysteel Global notes.
Japanese mills plan to produce 1.92 million tonnes of small bars (most are believed rebars) during July-September, up 0.7% on year but down 7.4% on quarter, and 960,000 tonnes of H-beams, up 12.3% on year but down 0.1% on quarter.
Written by Yoko Manabe, yoko.manabe@mysteel.com
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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