Japan's steel demand to fall in Q2 CY'22 - METI

Japanese demand for carbon and special crude steel in crude steel equivalent for both domestic sales and exports will decline 4.2% on year to 23.33 million tonnes over April-June, according to the latest forecast released by the country's Ministry of Economy, Trade and Industry (METI) on April 12.

Japan's crude steel output during the current quarter will be 1.1% higher on month, and total crude steel output over January-June is to approximate 46.41 million tonnes, down 3.4% on year.

The ministry warned in its statement of the possibilities of declining steel demand due to the shortage of components including semi-conductors and the impact of the ongoing Russia-Ukraine conflict.

Japan's demand for finished steel products in the second quarter is expected to reach 20.98 million tonnes, down 0.5% on year but 1.6% higher on quarter.

METI estimated that steel consumption by Japan's construction sector in April-June is to rise 0.2% on year but down 6.7% from January-March to 4.67 million tonnes, while demand from the country's manufacturing sector may rise 1.8% on year and 1.2% higher on quarter to 6.17 million tonnes.

A Tokyo-based steel trader attributed the on-quarter decline in Japan's construction sector mainly to slower progress of civil engineering projects because April-June is the budget term for the government.

"The rise in steel demand among manufacturers includes expected improving auto output and stable operations by shipbuilders, though we are still uncertain about the demand recovery by the domestic auto sector, as their plans have been adjusting lower every month over the recent half year," he added.

As for exports, METI expected that auto output at Southeast Asian countries during April-June will recover to the same level as a year ago, and to be higher by 8.9% on quarter to 6.9 million tonnes.

"Japanese mills must be having difficulties to make their actual steel output plans amid concerns about the supply shortage of components, the impact of the ongoing Russia-Ukraine conflict, and new COVID-19 outbreaks in and outside of Japan," a second trader in Tokyo said.

METI will compile and release Japanese mills' production plans for the current quarter in May, Mysteel Global noted.

Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.