Japan's crude steel output slumps again in fiscal 2022

The 15.5% bounce in crude steel output during fiscal 2021 which had fuelled hopes among Japan's steelmakers their fortunes were recovering failed to reappear last year, the new data from Japan Iron & Steel Federation (JISF) showed.

During the year to end-March, Japan's crude steel output plunged by 8.1% to 87.85 million tonnes, with the production totals for 23 of 26 finished-product categories JISF tracks all falling. The three were medium-sized bars, rounds for tube-making, and rails, tyres and wheels for rolling stock - hardly significant items for the mills.

The year before, crude steel output had soared from the pandemic-induced slump to reach 95.6 million tonnes, as Mysteel Global had reported. But during fiscal 2022, the lingering effects of the pandemic continued to disrupt international supply chains and hamper automobile production, while at home, construction demand declined due to high input prices and labour shortages, Tokyo-based sources said.

Japan's steel exports were also restrained in response to the softening of overseas steel markets.

By production process, output of steel produced by converter last fiscal fell by 9.6% to 64.34 million tonnes and that of steel made using electric furnaces declined by 4% to 23.5 million, the JISF statistics showed. During fiscal 2021, output of both had jumped by about 15%.

Interestingly, production of items used in construction declined only slightly on year, while output of those used in automotive applications, electric appliances and others fell markedly, the data showed.

For example, small bar production during last fiscal (consisting almost entirely of rebars) totalled 7.6 million tonnes, lower by just 2% from the previous year, while production of H-beams was lower by just 0.3% on year at 3.6 million tonnes.

By contrast, production of hot- and cold-rolled coils, galvanized sheet and others used in automotive applications plunged by over 10% on average.

For example, output of high carbon wire rods used in items such as fasteners and tyre cords plunged by 15.2% to just 500,700 tonnes last year, while production of hot-rolled specialty steel generally fell by 10.7% to 16.35 million tonnes, the JISF numbers showed.

For the current fiscal beginning April 1, Japan's integrated mills will be closely monitoring the health of the country's auto sector once again, even though the consensus is that domestic demand will continue to recover moderately.

In its forecast for current quarter steel demand issued on April 12, Japan's Ministry of Economy, Trade and Industry (METI) warned that demand from the civil engineering sector is expected to fall for seasonal reasons and that mid- and small-sized building projects are still facing difficulties.

On the other hand, automobile production is showing signs of improvement, METI had said, though risks remain, as Mysteel Global reported.

On Tuesday, Japan's steel industry media quoted Toyota Motor as announcing that it had revised its domestic production target for May downwards by 1% from its earlier target to approximately 250,000 units (for 18 days of operations), while production in June is expected to remain flat at 320,000 units (for 22 days of operations).

Written by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.