Japan’s crude steel production rose 11% month on month to 7.2 million mt in October, marking a fourth consecutive month of increase since hitting a year-to-date low in June, Japan Iron & Steel Federation data released Nov. 24 showed, as demand from the manufacturing sector continued to firm.
The total was still down 11.7% year on year, the data showed.
However output continued rising on a month-on-month basis as steelmakers increased in export sales and blast furnaces came back online after being idled due to the pandemic, market sources said.
Output from blast furnaces comprised 5.3 million mt of the total, up 11.5% from September and down 13.1% on year, and from electric-arc furnaces 1.9 million mt, up 9.6% from September and down 7.3% on year.
Japan’s manufacturing purchasing managers’ index or PMI published by au Jibun Bank rose to 48.7 in October from 47.7 in September, but remained in contraction for the 18th straight month, most recently impacted by the pandemic.
Crude output over January-October totaled 68.41 million mt, down 18.4% on year.
The uptick in crude steel production has boosted steelmakers’ demand for raw materials, although as most rely on long-term contracts for iron ore imports, demand for spot cargoes has seen little increase. The increasing production was instead lending support to ferrous scrap, which has seen prices continuing to rise in November.
JFE Steel restarted its 5,000 cu m No. 4 blast furnace at Fukuyama in October at the West Japan Works after it was idled at end June, while Nippon Steel plans to resume operations at two blast furnaces at Muroran and Kimitsu by end November, taking its total number of blast furnaces in operation to 11.
However, a fresh wave of coronavirus infections in Japan has raised concerns that production could again be impacted in coming weeks. Japan reported 2,168 new COVID-19 cases Nov. 22, the fifth straight day that new cases had exceeded 2,000.
— Clement Choo, Samuel Chin
