Japan's crude steel output to rise 1.3% q-o-q in Q3 CY'21
Japan’s output of crude steel including both carbon and special steel during the current July-September quarter is forecast to rise by 1.3% on quarter to about 24.6...
Japan's output of crude steel including both carbon and special steel during the current July-September quarter is forecast to rise by 1.3% on quarter to about 24.67 million tonnes, according to a survey released by Japan's Ministry of Economy, Trade and Industry on August 5.
The quarterly survey of steel production conducted by METI among the Japanese mills, showed that this quarter's output would be 30% higher on year, indicating the continuing recovery from Japan's first wave of the COVID-19 outbreak during July-September 2020. The mills' production estimate was almost same as METI's demand forecast announced on July 13 of 24.69 tonnes, Mysteel Global notes.
A Tokyo-based steel trader observed that the forecast rise in steel production planned by steelmakers must be to match the firm demand from manufacturers, mainly the automotive and machinery sectors.
"Electric-arc-furnace mills usually slow their output this quarter during the peak of summer to reduce consumption of high-priced power, but the integrated mills have been producing at a very high level," he explained. "That's why the overall production outlook is higher."
The trader pointed out that the production plan for steel for export shows more growth than for domestic sales. "That's because the Japanese mills are trying to allocate more for exports because overseas prices are higher than those in the home market and they prefer to export more to make profits," he added.
"Domestic demand is still growing so the mills will not be able to continue lifting their export volume higher," he predicted. "Because of this, they will pressure domestic buyers on prices and will try and lift domestic prices to reduce the gap with overseas markets."
Japan's Jul-Sept finished steel production plan (METI survey)
| Total | Carbon steel | Special steel | |
| Total(million t) | 21.69 | 17.02 | 4.67 |
| Y-o-Y | +29.8% | +25.1% | +50.8% |
| Q-o-Q | +3.7% | +4.1% | +2.4% |
| -Domestic sales (million t) | 14.06 | 10.73 | 3.33 |
| Y-o-Y | +28.8% | +24.9% | +43.1% |
| Q-o-Q | +0.5% | 0% | +2.0% |
| -Exports (million t) | 7.63 | 6.3 | 1.33 |
| Y-o-Y | +31.8% | +25.9% | +74.0% |
| Q-o-Q | +10.3% | +11.8% | +3.6% |
Meanwhile, by product, the Japanese mills plan to produce 910,000 tonnes of H-beams during July-September, up 9.3% on year but down 2% on quarter, and 1.86 million tonnes of bars (mostly rebars), down 0.5% on year and 5.4% lower on quarter. METI does not give estimates for output of other products.
"About half of the H-beams and most of rebars are produced by mini-mills, so I guess that the forecast decline on quarter is just because of seasonal reasons," a construction steel trader in Tokyo explained. "The demand for such construction steel items is expected to pick up soon when autumn demand arrives, so production next quarter should be higher," he remarked.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Photo Credit: MetalMiner
