Japan's Oct-Dec crude steel demand to rise 12% on quarter
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Japan's crude steel demand for October-December quarter is expected to rise 12% on quarter to about 21.1 million tonnes, according to the forecast released by Japan's Ministry of Economy, Trade and Industry (METI) on October 7, indicating the domestic steel mills will adjust their steel output accordingly to meet up with the better demand from the end-users.
The volume including both carbon and special steel, however, is still 10.7% lower on year, as that the negative impact of the COVID-19 pandemic still exists, according to the release. METI officials in charge of the forecast could not be reached for further comment on Friday.
The Japanese steel market sources expressed no surprise at the forecast, agreeing that higher domestic steel output on quarter is expected.
"The Japanese automakers, as major steel consumers, have already started lifting their output from July and the domestic integrated mills have raised their output targets, so the actual production will be up gradually," a Tokyo-based trader explained.
Nippon Steel, Japan's largest integrated mill, announced October 6 to restart its No.2 blast furnace with 4,500 cu m inner volume at Kimitsu area of East Nippon Works by late November.
JFE Steel, Japan's second largest integrated mill, may soon be able to ramp up the output to the full capacity of its blast furnace with an inner volume of 5,000 cu m at Fukuyama section of West Japan Works after having restarted on August 26, Mysteel Global understands.
As for finished steel, Japan's carbon steel consumption by the construction sector is expected to drop by 3.7% from July-September and down 11.4% on year to about 5.2 million tonnes for October-December while the volume by manufacturers may be up 5.2% on quarter but down 9.7% on year to 6.4 million tonnes, according to the METI.
The ministry explained in the release that stable demand from civil engineering is anticipated but the building construction may be stagnant with steel consumption because of the persistent negative impact of the pandemic.
Japan's demand for special steel over October-December, however, is expected to rise by 24.7% on quarter to about 2.9 million tonnes, though still 11.5% lower on year.
A steel trader in Nagoya explained that the higher special steel demand is because of the higher demand from the domestic manufacturing industry, especially the auto sector.
"Special steel producers were forced to trim their output largely during the first half of current fiscal year (April-September) because of slower economic activities over the virus outbreak, their production will be still below on year but will probably grow faster than expected on the firm demand from the auto sector," he explained.
Japan's finished steel demand forecast (Oct-Dec)
| Total | Carbon steel | Special steel | |
| Total ('000 tonnes) | 19,450 | 15,600 | 3,850 |
| Y-o-Y | -10.1% | -8.6% | -15.6% |
| Q-o-Q | +4.1% | +1.0% | +18.7% |
| For domestic ('000 tonnes) | 13,250 | 10,400 | 2,850 |
| Y-o-Y | -10.7% | -10.4% | -11.5% |
| Q-o-Q | +5.4% | +1.1% | +24.7% |
| For export ('000 tonnes) | 6,210 | 5,200 | 1,010 |
| Y-o-Y | -8.7% | -4.7% | -25.2% |
| Q-o-Q | +1.5% | +1% | +4.6% |
Source: METI
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Photo: JFE Steel
