Japan's steel exports increase slightly in May'23

Japan's steel exports increased by 0.2% y-o-y to 2.99 million tonnes (mnt), according to trade statistics for May released by the Ministry of Finance on 15 May, 2023. This marks the first increase in three months, although it was only a slight increase.

Exports to EU and Middle East

Exports to the EU increased by 24.5% to 277,000 tonnes (t), surpassing 222,000 t in May last year. Exports to the Middle East also increased by 85.7% to 112,000 t after Ramadan. These hikes helped compensate for sluggish demand in Asian exports.

Exports to different regions

Exports to South Korea increased by 7.9% to 498,000 t, marking the sixth consecutive month of growth. However, exports to ASEAN economies fell 15.7% to 908,000 t, marking the third consecutive month of decline. Exports to China also fell 21.6% to 265,000 t, marking the 15th consecutive month of year-on-year decline. Exports to the U.S. increased by 7.8% to 102,000 t, the first increase in three months. However, anti-dumping measures are applied to many Japan materials in the U.S., and there is a risk that additional tariffs will be imposed if the duty-free quota is exceeded.

Price difference:

During the May export negotiations, there was a price difference of more than $200/t in the hot-rolled coil (HRC) market between Asia and Europe. Even with the ocean freight taken into account, the export profitability for remote areas such as the EU was relatively good.

Steel imports:

Total steel imports rose 3% to 586,000 t, surpassing the previous year for the fourth consecutive month. Sales from South Korea increased by 6.9% to 269,000 t, those from China increased by 7.8% to 107,000 t, and those from ASEAN decreased by 32% to 25,000 t.

Outlook:

Although exports to the EU have increased, the European market is approaching a period of low demand due to vacation. Vietnam is also exporting hot products below $700, so the adjustment is intensifying. Exports to the EU in Japan are likely to slow down in the future, and it is expected that it will continue to be difficult to increase steel export contracts for the time being as Asia enters the rainy season and monsoon season.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.