Japan's Oct crude steel output falls another 10.6% y-o-y

Despite a slight improvement compared with September, Japan's crude steel output in October fell by 10.6% on year to 7.35 million tonnes, according to the new data from Japan Iron & Steel Federation (JISF), making for the 10th straight monthly year-on-year dip.

Last month's result took Japan's January-October total to 75.16 million tonnes, lower by 6.5% from the first 10 months of last year.

On an annualized basis, the result suggests the country's calendar year 2022 production should reach only around 90 million tonnes - well short of the psychological threshold of 100 million tonnes the industry has targeted for decades, Mysteel Global notes.

Significantly, crude steel output per day in October averaged 237,000 tonnes, the JISF calculated, which was lower by 0.4% from September's average, when ordinarily Japanese steelmakers should be ramping up production to meet the country's busiest steel-consumption period during autumn.

Japanese industry insiders have been saying that steel demand for public infrastructure and civil engineering is firm, but this is not being reflected in the data, Mysteel Global noted.

For example, by steelmaking process in October, crude steel production by Japanese integrated mills using converter was 5.3 million tonnes, up 3.2% from September but down by 11.8% from October last year and making for a 10-month slide. That produced in electric furnaces (both carbon and special steel) totalled 2.05 million tonnes, up 2.3% on month but down 7.5% on year - lower on year for three successive months.

Last month, most EAF mills should also have emerged from their summer maintenance shutdowns, and the fact that the increase from September was so small indicates that Japan's carbon steelmakers at least have little confidence that demand for their construction steel will surge anytime soon.

The latest data from Japan's Ministry of Land, Infrastructure, Transport and Tourism is not encouraging, with construction starts on new buildings in September falling 2.4% on year to 6.1 million square meters. Within the total, starts on steel-framed structures were lower by 6% on year at 3.22 million sq m, Mysteel Global noted.

Japanese mini-mills' concerns about construction-sector demand are also evident in their production of rebars and other small bars in October, which had fallen for the fourth straight month on year, declining by 7.7% to 672,800 tonnes, the JISF numbers showed. Slightly more encouraging for construction steel was the result for H-beams, where output last month rose by a tiny 0.6% on year to 316,500 tonnes.

For flat products, though output of ordinary cold-rolled coils last month declined by 7.5% on year to 1.22 million tonnes, that of galvanized sheets picked up slightly on year by 1.2% to 747,300 tonnes, the JISF data showed. Both are crucial for automobile production where clouds continue to loom, as reported.

Also on Tuesday, Japanese auto giant Toyota Motor announced that it expects production in December at its plants in Japan and worldwide to total around 750,000 units, lower by 50,000 units from December last year, due to the continuing impact of the semi-conductor shortage.

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.