Japan: Crude steel production drops for second consecutive year in CY'23

Japan, the world's third-largest steelmaker, saw its crude steel production declining by 2.5% y-o-y to 86.99 million tonnes (mnt) in CY'23, marking the second consecutive year of decline and falling below 90 mnt for the first time since 2020. The decline is due to subdued demand from manufacturing and construction sectors, coupled with China's increased exports, dampening domestic market sentiments.

Steel output down for 2nd year in a row

Steel production continued to fall in 2023, marking the second consecutive year of decline. Furnace output fell 1.9% y-o-y to 64.17 mnt, while electric arc furnace (EAF) steel production saw a steeper 4.2% y-o-y drop to 22.83 mnt.

Despite both categories declining, the decrease in converter furnaces was less compared to electric furnaces, partially due to a rebound in the automobile sector. As a result, the share of EAF steel in total crude steel production dipped slightly, from 26.7% (the 22-year average) to 26.2%.

Decline in steel sales

Ordinary steel: Sales of ordinary steel, the workhorse of the industry, fell by 1.9% y-o-y to 67.53 mnt. This marked the second consecutive year of decline for this category. This was accompanied by a noticeable decrease in building materials such as H-beams and thick plates, suggesting a slowdown in construction activity.

Hot-rolled steel production dropped by 2.1% y-o-y to 7.69 mnt, marking the second consecutive year of decline.

Crude steel production up marginally in Dec'23

Domestic crude steel production increased by 1.1% y-o-y in Dec'23, reaching 6.98 mnt, marking the first increase in two months. Daily production dipped 5% m-o-m in Nov'23 to 225,000 t, whereas, Oct-Dec'23 output edged up by 0.9% y-o-y to 2.16 mnt.

Outlook

The Japanese steel industry faces continued challenges due to weak domestic and export demand. Some positive signs in December suggest potential for slight recovery, but long-term outlook remains uncertain.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.