Japan's steel output, demand to fall y-o-y in Q2 CY'24: METI

Japan's Ministry of Economy, Trade and Industry (METI) released a steel demand forecast for Q2'CY24 (April-June) on 11 April 2024. Crude steel production is expected to reach 21.72 million tonnes (mnt), a modest increase from January-March 2024 (Q1'CY24). However, this represented a 2.2% y-o-y decline compared to the same period last year. This marked the first time since July-September 2023 (Q3'CY23) that steel production is projected to fall below the previous year's corresponding period. Notably, demand for steel materials remained weak within Japan.

Factors affecting demand

At a press conference, Miho Suzuki from METI mentioned that while demand for automobiles is picking up, other industries like construction and manufacturing are experiencing sluggish demand. Exports to industrial machinery are also down, which could lead to further decreases in demand. It is important to take cautious measures to address these challenges.

Demand for steel products projected to fall

The steel demand forecast for the April-June 2024 (Q2'CY24) period is predicted to be 18.95 mnt, reflecting a decrease of 0.8% q-o-q from the prior forecast and a 5.4% y-o-y decline compared to the same period last year. As a result, both q-o-q and y-o-y comparisons projected negative trends.

Breakdown of steel demand

• Automobile demand showed signs of recovery, while industrial machinery production slowed down.
  
  
• Construction machinery, sensitive to external demand, experienced sluggish growth.
  
  
• Weak demand also anticipated in construction, shipbuilding, and electrical machinery sectors.
  
  

Export concerns in the Chinese market

Export demand is expected to weaken globally, except for North America. Additionally, METI highlighted concerns about the negative impact of China's worsening steel supply-demand imbalance.

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