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Japan Jan crude steel output falls most in 27 mths

Tuesday, 21 February 2012 | 00:00
Japan's crude steel output fell the most in more than two years in January as exports plunged, more than offsetting a recovery in domestic manufacturing output.
Crude steel output fell 10.6 percent to 8.63 million tonnes, the biggest fall in the 27 months since October 2009, amid the financial crisis sparked by the Lehman collapse, data from the Japan Iron and Steel Federation showed.
It was the fifth consecutive month of year-on-year falls.
The yen's surge to near record highs and devastating floods in Thailand forced Nippon Steel Corp and JFE Steel Corp , Japan's top two steelmakers, to curtail exports.
The yen's strength also opened the door for cheaper imports from Asian rivals such as South Korea's POSCO and Baosteel of China, pressuring prices and forcing Japanese makers to cut output. Rising risk appetite helped the dollar hit a six-month high of 79.89 yen on Monday, before it slipped back to 79.50 yen.
The steel figures, not seasonally adjusted, showed output in January rose 2.70 percent from December.
The steel industry body expects crude steel output in Japan, the world's No.2 producer, to drop by around 2-3 million tonnes from 107.6 million tonnes in 2011. That would follow a 1.8 percent decline in output last year.
The federation expects Japan's carbon steel exports to fall to around 25 million tonnes in the 2012/13 financial year, starting on April 1, from an estimated 27-30 million tonnes in financial 2011/12.
But imports will stay at the current level of 5-6 million tonnes a year, less than 10 percent of the domestic market, due to specification issues, it said.
Source: Reuters
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