Crude steel output in Japan, the world’s No.3 producer, fell 4.5% in fiscal /25, weighed down by slack demand in construction and manufacturing as well as slow exports amid increasing exports from the world’s top steel producer China.
Output, which is not seasonally adjusted, slid to 82.95 million metric tons in the year ended March 31, the third consecutive annual drop, the Japan Iron and Steel Federation said on Tuesday.
Production was the lowest since fiscal /21, when a demand collapse caused by the COVID-19 pandemic drove production to its lowest point in roughly 50 years, according to an analyst at the federation.
“Steel demand was dampened by construction delays caused by labour shortages and high material costs, as well as a sluggish recovery in production within the automobile and other manufacturing sectors,” the analyst said.
“Additionally, an oversupply in overseas markets driven by China’s massive steel exports contributed to a decline in Japan’s steel exports,” he added.
Production is expected to continue declining as Nippon Steel 5401 shut down one of its blast furnaces at the end of March and JFE Steel plans to temporarily suspend one of its blast furnaces in mid-May.
Furthermore, U.S. tariffs have heightened uncertainty about steel demand, the analyst said.
Tadashi Imai, the chairman of the federation, warned last month that U.S. tariffs on steel and automobiles could reduce Japan’s annual crude steel output by several million tons to below 80 million tons.
President Donald Trump raised duties on imports of steel and aluminium to 25% from March 12, with no exemptions. Tariffs on vehicles and auto parts took effect on April 2.
In March, Japan’s crude steel output rose 0.2% from a year earlier to 7.21 million tons, the first increase in 13 months, though local demand stayed weak, the federation’s analyst said. Output was up 12.6% from February.
Source: Reuters
