Japan's crude steel output may rise 1% but still remain below 100 mn t this year

Japan's Ministry of Economy, Trade and Industry (METI) forecasted on 10 Oct'21 that the country's crude steel production will increase by 16% to 96.19 million tonnes (mn t) in CY'21 compared to the previous year.

According to SteelDaily, Japan's crude steel production was recorded at 104 mn t between 2016-2018, but continued to decline from 2019 due to a decrease in exports because of the US-China trade dispute and the Covid-19 outbreak. In the case of this year, it turned upward for the first time in two years, but it did not reach 100 mn t for three consecutive years.

METI pointed out that although the recovery is steady, it is still not as good as it was before the outbreak of Covid-19. Japan's crude steel production in Oct-Dec'21 is expected to increase by 0.8% q-o-q and 9.6% y-o-y to 24.11 mn t.

Steel demand is expected to increase by 2.6% q-o-q and 6.7% y-o-y to 21.84 mn t of which 17.14 mn t will be general steel and 4.7 mn t, special steel.

Pothong Steel's domestic demand is estimated to have increased by 4.6% q-o-q and 1% y-o-y to 11.34 mn t. In the fourth quarter of this year, the construction industry's demand for steel is expected to decrease by 2% q-o-q but to increase by 1.6% compared to the same quarter last year.

In the case of the manufacturing sector's steel consumption, it is expected to increase by 10.3% q-o-q and 0.5% y-o-y to 6.43 mn t. As production and exports contract due to turmoil in the parts supply chain, steel demand in the automobile sector will decrease slightly, but shipbuilding-related steel demand is expected to increase by 6.2% q-o-q and decline 6.9% y-o-y.

Considering the fact that the spread of Covid-19 in South East Asia is not easing, Japan's Potong Steel's exports in Oct-Dec'21 are expected to remain flat compared to the previous quarter.

METI pointed to the spread of Covid-19 mutations, China's electricity supply control and production cuts as major factors. He also pointed out that even if China's steel exports are declining, they are still at their peak, and that if China's steel exports increase again, it could have a negative impact on Japan's steel exports.

He added that Japanese manufacturers should also closely monitor changes in China's policies and formulate and implement strategies accordingly.