Japan's steel exports decline for first time in 2 years amid global slump

Japan Metal Daily: Japan's steel exports declined by 3% y-o-y to 31.39 million tonnes (mnt) in CY'24, marking the first decrease in two years, according to the Ministry of Finance's trade statistics. The decline in exports is attributed to sluggish global demand for steel, particularly for building materials, and China's aggressive export. The steel market has also been affected by the expansion of trade measures.

In monetary terms, exports decreased by 2.4% to JPY 4.3952 trillion. This marks the third consecutive year that exports have remained in the JPY 4 trillion range. Meanwhile, the Asian market for hot-rolled coils experienced a downturn, with prices hovering around $500/t. With the exception of grain-oriented electrical steel sheets, dollar sales prices generally decreased.

Regional export performance and trade barriers

Exports to the EU saw a substantial decrease of 33.6%, falling to 1.345 million tonnes (mnt) after exceeding 2 mnt for the first time in 2011. This decline is attributed to the EU's review of safeguard measures and the implementation of tariff quotas. The EU has set limits on the use of tariff quotas by country, affecting Japan's steel exports. Furthermore, an anti-dumping investigation into hot coils against Japan began in August. These trade measures have contributed to the decline in exports to the EU.

The proportion of steel exports to non-Asian countries decreased to 27.9% y-o-y, down 2.2 points from the previous year. New concerns have emerged, including an anti-dumping lawsuit filed by Hyundai Steel of South Korea against Japanese hot coils and a safeguard investigation into steel sheets in India.

Anti-dumping measures typically exclude re-exported products, but customers must comply with bonded measures. There is growing concern that the implementation of these measures will significantly impact Korean rerollers.

Rise in steel imports

In contrast to exports, Japan's steel imports increased by 4.1% y-o-y in 2024, reaching 7.549 mnt, exceeding 7 mnt for the fourth consecutive year. In monetary terms, imports rose by 2.8% to JPY 1.3527 trillion, the second highest value on record after 2010.

Outlook

Japan's steel industry is expected to face significant challenges in the short term, driven by sluggish global demand and the ongoing impact of trade measures. Furthermore, rising imports, especially from China, may intensify competition in the domestic market.

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