Japan's Crude Steel Output for Oct-Dec'18 Quarter to Increase Marginally Y-o-Y basis: METI

Japan's Ministry of Economy, Trade and Industry (METI) has estimated that country's crude steel output would rise to 26.45 MnT for the three-month period (Oct to Dec quarter), up 0.2% against the corresponding quarter of previous year.

However, on Q-o-Q basis, there is a small drop against the Jun-Sep'18 quarter during which METI had predicted crude steel output of 26.54 MnT. At present September production numbers are not out and Japan's crude steel output for Jul and Aug'18 months together stands at 17.23 MnT.

The rise in demand on y-o-y basis is attributed to solid local demand for automobiles as well as industrial and construction machinery.

According to METI, demand for steel products, including those for exports, is forecast to rise to 23.69 MnT in the Oct-Dec quarter, up 0.3% y-o-y basis.

Exports, which typically account for about 40% of Japanese steel production, are predicted to increase 0.5% from a year ago during the period, the ministry said, shrugging off higher U.S. import tariffs on steel and an escalating U.S.-China trade spat.

METI's forecast does not foresee any major impact from the tariffs, said Noriyuki Kuroda, director of the metal industries division at the ministry, at a news conference on Tuesday.
"Japan's steel export to the United States are slightly weakening recently, but that's because of strong domestic demand and not because of the U.S. tariffs," he said. He also said Asia's steel demand is fairly healthy despite the U.S.-China trade conflict.

After the imposition of U.S tariffs on steel imports with effect from Jun'18, although there is anxiety in the market and the trade war between major economies like U.S. China, and EU have intensified, the global steel demand environment continues to remain strong.

Japan's industry ministry has mentioned that the import tariffs announced by U.S. and the countermeasures taken by various other economies have not been factored into the forecast. METI officials are of the opinion that at the present stage any dramatic impact of U.S. tariffs is unlikely and that the country is carefully watching the entire situation.

METI's Crude Steel Output Forecast

*Jul-Sep'18 crude steel output is METI's forecast as Sep'18 numbers are still awaited