Japan's FY20 steel output falls to 51-year low, down 16% y-o-y

Japan's crude steel output during fiscal 2020 (April 2020-March 2021) including both carbon and special steel declined to a new low since fiscal 1969, down 15.9% on year to about 82.8 million tonnes, according to the latest data from the Japan Iron & Steel Federation (JISF) released on April 22.

FY20 was also the fourth year that Japan posted an on-year decline in steel output or the second year with the tonnage below 100 million tonnes, Mysteel Global understood from the JISF data.

"The decrease was mainly due to the negative impact of the COVID-19 during the first half of FY20, as the output recovered in the second half," a JISF official commented.

In March, Japan's crude steel output was at about 8.32 million tonnes, up 4.6% on year and 11.3% higher on month, or the first month with an on-year gain in 13 months, among which, blast-furnace (BF) mills produced 6.23 million tonnes, up 3% on year and 12.3% higher on month, and electric-arc-furnace (EAF) mills posted gains of 9.7% on year and 8.3% on month at about 2.1 million tonnes, according to JISF release.

"low base a year ago led to on-year rises in March, but on-month rises suggest the steady improvement in demand, and this hopefully, will continue," a sales official from an integrated mill in Tokyo commented.

For FY20, among Japan's total output, carbon steel accounted for 65.3 million tonnes, down 13.4% on year and special steel posted a 24.1% on-year slip to about 17.45 million tonnes, and the domestic BF mills produced approximately 61.4 million tonnes, down 18% on year, and balance was from EAF mills, which went down 9.1% on year, and the latter's contribution to the country's total increased to 24.1%, up 1.9 percentage points on year, according to the data.

As for finished steel output for FY20 also including both carbon and special steel, it approximated 73.5 million tonnes, down 14.8% on year, among which, carbon steel accounted for 58.7 million tonnes, or recording the fourth year with on-year declines, down 13.5%, and special steel products fell 19.8% on year.

"Japan's steel output has been recovering on better demand from the manufacturers, so we believe FY20 should be the bottom, and the volume for FY21 will be higher," a Tokyo-based steel trader commented.

In December 2020, JISF forecast Japan's crude steel output to rise to 85-90 million tonnes for FY21, but "If steel output can be maintained at the current level, the actual output should be much higher than expected," the trader added, "but uncertainties still exist in Japan's economy, as new COVID-19 cases are still on the rise and vaccination has been progressing more slowly than the other countries," he warned.

Japanese government will need to decide whether to impose the third state of emergency by late Friday.

Japan's FY20 carbon steel finished products output (incomplete)

Source: JISF

Written by Yoko Manabe, yoko.manabe@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.