Japan’s crude steel production amounted to 42.21 million mt over the January to June 2020 period, down 17.4% from a year earlier, data released July 22 by the Japan Iron & Steel Federation showed.
In June alone output fell 36.3% year on year and 5.5% from May to 6.59 million mt.
Hot-rolled steel production in H1 came to 37.15 million mt, down 17.5% year on year. In June, it was 5.05 million mt, 33.9% lower than in June 2019 and 2.7% than in May.
Production from blast furnaces in H1 was down 17.2% year on year at 31.68 million mt and 17.9% lower from electric arc furnaces at 10.53 million mt.
In H1 the proportions of crude steel produced from blast furnaces and electric arc furnaces were little changed at 75.0% and 25.0%, respectively compared with 74.9% and 25.1% in H1 2019.
The Japanese steel industry faces challenges as demand for steel products in the third quarter, is expected to be 17.28 million mt, down 24.3% on the year, the Ministry of Economy, Trade and Industry said July 8.
Demand from construction is expected to remain sluggish, the ministry forecast, together with manufacturing, but steel demand is expected to pick up as Japanese automakers gradually raise their production.
Domestic carmakers such as Toyota Motor and Mazda Motor, have announced steps to increase production from August. Toyota will ease its reduction of vehicle production in August, cutting by only about 3%, as opposed to 10% in July and 40% in June.
“The good news is, we have heard some of the vehicle and agriculture machinery producers planning to revert to normal productions in August,” a Japanese steel and scrap trader said. “This is at least some good news for potential steel demand to return from the slumps during Q2.”
During June, Japan’s manufacturing economy faced further challenges as a purchasing managers’ index survey showed sharp reductions in new orders, output and purchasing. The au Jibun Bank Japan Manufacturing PMI edged up slightly to 40.1 in June, from 38.4 in May. Despite the increase, manufacturing was still in contraction and therefore indicated a further deterioration in the health of the goods-producing sector. The au Jibun Bank Flash Japan Manufacturing PMI for July rose to a seasonally adjusted 42.6.
— Clement Choo, Samuel Chin
