HRC Exports from Major Japanese Mills Fall to 6 Years Low in 2018

As per reports from Japan Metal Daily, Japanese HRC export volume is persistently showing downtrend and has recorded a significant drop of 1.5 MnT in CY18 against previous year. Japan based major steel mills like Nippon Steel Sumikin and JFE have reduced their export volumes amid increased demand in domestic market considering it as priority.

Major steel mills based in Japan have reduced their HRC export volumes due to following reasons-

1. Natural disaster affect supply of HRC exports- Their was natural disaster in western Japan where torrential rain and typhoons hampered the production activities in Nippon Steel Sumikin- Nagoya Works and JFE West Japan Works in turn reducing supply of exports from Japan.

2. Mills undergoing maintenance- There is a periodic refurbishment of hot rolling mill at Nippon Steel Sumikin- Oita works which lead to reduced volumes of HRC till November loading.Meanwhile JFE on 30th October announced that company will stop the production of second blast furnace which is in bad condition in Kurashiki district of West Japan Works till December.

3.Increasing preference to Russian & Chinese HRC in Asian markets - In China demand for HRC remain sluggish both in domestic and export market this year. Meanwhile nation also witnessed decline in automobile sales and downstream products like household and appliances. Meanwhile Russia based MMK steel and Brazil based Arcelor Mittal facing difficulties in exporting HRC to United States post imposition of tariffs by 25% on steel products.Thus they have diverted their trades to Asian markets by providing material at cheaper prices. Comparatively Japanese mills are offering HRC to Asian markets on higher side.

Japanese mills are constantly facing tough situation as they are decreasing production levels and spot sales have already been paid down due to lower volumes in recent years. Thus demand in domestic automotive sector is expected to resume from Jan-Mar quarter and it will slowly recover to full scale post spring season.