Japan's Jan crude steel output declines after a 10-month rise- JISF

In January, Japan's crude steel output including both carbon and special steel declined on year for the first time after 10 consecutive months of rises, down 2.1% on year to about 7.76 million tonnes, according to the data released by The Japan Iron & Steel Federation (JISF) on February 22. Despite the decrease in output, the operational rate at Japanese steel mills still hovers at a high level, a JISF commented.

Japan's January steel output was also down 2.2% on month, among which blast furnace (BF) mills produced 5.83 million tonnes, down 4.2% on year and 0.8% lower on month, and the balance by electric-arc-furnace (EAF) mills, up 4.9% on year but down 3.5% on month, according to the JISF data.

The output decline was partially due to the high base of last year when Japanese steel mills lifted production to meet improving demand. "The overall market sentiment hasn't changed much, and Japanese steel output is improving even though the room for the growth might be limited," the JISF official said.

A sales official from an EAF mill in Tokyo attributed the on-month decline by EAF makers to the operational stoppages in early January both for new year holidays and scheduled maintenance plans. "Some other EAF mills are conducting maintenance works in February, so steel output by EAF mills may not rise much this month," he said.

In January, Japan's finished steel output including both carbon steel and special steel declined by 2.6% on year and 4% lower on month, the JISF data showed.

By product, Japan's plate output in January largely increased on year while that for most other products declined. The JISF official explained that the rise was partially due to the active plate consumption by domestic shipbuilders with increasing new vessel orders.

"We expect plate output to stay at a high level, though we're uncertain about how much further plate producers can lift their output because Japanese steel mills have been restructuring their production facilities," the JISF official said.

As for the coming months, Japan's overall crude steel output may be hard to lift, as Nippon Steel, the country's largest integrated mill started relining its No.3 blast furnace with 4,300 cu m at Nagoya works in central Japan at the end of January, and it plans to restart the BF in June, as reported.

"But Japanese integrated mills will maintain their operations at high levels to meet the expected rising sheet demand by domestic automakers," a Tokyo-based trader predicted.

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

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