Japan: METI predicts modest steel production growth amid weak demand

Japan Metal Daily: Japan's Ministry of Economy, Trade and Industry (METI) reported that crude steel production is projected to rise slightly by 0.3% y-o-y compared to the same period of last year, reaching 21.63 million tonnes (mnt) for the July-September quarter. While this marks the second quarter in a row of increased production, the overall annual production rate is anticipated to stay low at about 85 mnt. This is primarily attributed to a decline in both domestic and international demand for steel products.

Stagnant demand and cautious optimism

METI has projected a "no significant change" in overall demand for the July-September period. While the automotive market is anticipated to gradually recover, sluggish demand from Japanese automakers in China and Southeast Asia is hindering a full-fledged rebound this fiscal year.

Exports, meanwhile, remained influenced by the supply-demand balance of Chinese steel products, necessitating continued close monitoring.

Production to slightly exceed demand

The planned crude steel production marginally surpasses METI's demand forecast of 21.51 mnt for the quarter. However, the overall production level remains low. Factors contributing to this include the slow automotive recovery and sluggish construction demand due to labour shortages.

Steel production plan

The company is planning to produce 19.06 mnt of steel, a 3.4% y-o-y increase over the previous year. This includes 15.06 mnt of ordinary steel and 3.99 mnt of special steel, representing 0.9% and 3.4% y-o-y growth, respectively. Of the ordinary steel, 9.27 mnt will be for domestic consumption and 5.79 mnt for export, expected to increase by 0.9% and 8.1%, respectively, compared to the previous quarter. The company has a target to produce 870,000 tonnes (t) of H-beam and 1.7 mnt of small rod during July to September. In comparison to the previous fiscal quarter (April to June), H-beam production is set to increase by 80,000 t, while small bar production is planned to decrease by 80,000 t.

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