Japan: Steel production declines for 6th consecutive month in Aug'24

Japan Metal Daily: Japan's domestic crude steel production declined for the sixth consecutive month in August 2024, falling by 3.9% y-o-y to 6.87 million tonnes (mnt) compared to the same period last year, as per Japan Iron and Steel Federation (JISF). The demand for steel products remains sluggish due to rising procurement costs and limited construction capacity. Construction companies are selectively pursuing projects, leading to a softening trend in the domestic market.

Daily, cumulative production drops

The daily production in August was 222,000 tonnes (t), a decrease of about 7,000 t m-o-m from 229,000 t in July. If the production level in August were to continue for the entire year, the total annual production would be less than 83 mnt.

The cumulative production volume for January to August stood at 56.67 mnt, marking a decline of 2.9% y-o-y from the same period last year. Additionally, the same fell by 4.2% y-o-y to 35.21 mnt from April to August, and the rate of decline has been rising since April.

Production slumps across categories

Steel production in August witnessed a decline across various categories. Converter steel production touched 5.307 mnt, showing a 3.6% y-o-y decrease. This marks the sixth consecutive month of decline for converter steel.

Additionally, electric arc furnace (EAF) steel production fell 4.7% y-o-y to 1.563 mnt. Notably, this is the first decline in two months.

The production of hot rolled steel further declined by 6.8% y-o-y to 5.908 mnt. This marks the sixth consecutive month of decline and surpasses the overall crude steel production drop.

Outlook

Japan's steel industry faces a challenging outlook, primarily driven by global economic uncertainties and competitive pressures. The recent softening of the domestic steel market, coupled with increased imports from Asia, poses significant pressure on the steel sector. While there are hopes for a recovery in construction demand, the market remains volatile, and regional disparities persist.

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