Japanese steel mills to lift Oct-Dec finished output by 2.2% on quarter: survey

Japanese steelmakers plan to lift finished steel production to 21.73 million mt over October-December, down 4% on the year but up 2.2% from July-September, the latest survey by Japan’s Ministry of Economy Trade and Industry showed.

Crude steel production is seen at 24.73 million mt, down 3.8% on the year but up 0.7% on the quarter, the survey revealed.

The production for domestic supply is planned at 14.60 million mt, down 6.5% on the year but up 2.4% from July-September while those for export at 7.13 million mt, up 1.7% on the year but down 3.6% on the quarter, according to the survey.

“Domestic demand is improving slowly but export movement by manufacturers are very concerned,” steel mill sources said Monday.

An integrated mill official said domestic manufacturers, including machinery makers, were concerned about the global economic uncertainty amid the US-China trade dispute. “They are adjusting their export plan lower, and their actual steel orders in previous months have also decreased,” he said.

The ordinary carbon steel orders booked by Japan’s machinery sector during July-August stood at 241,573 mt, down 8.8% on the year, while those for special steel were at 227,887 mt, down 28.3% on the year, according to the latest data by the Japan Iron & Steel Federation.

“We heard that production activities by overall manufacturers for domestic supply were stable, but it won’t compensate for a drop in their exports,” the integrated mill official said.

Meanwhile, an official from an electric arc furnace mill said the construction steel demand from the civil engineering works was expected to stay firm during the current quarter, but demand from building construction would be lower compared to last year because of all the projects related to the 2020 Tokyo Olympics.

“We haven’t included in our plan but there were several disasters hit Japan after summer, we will to see more of construction steel demand for recovery work, we have to put priority to supply to these works when those are ordered,” he said.
Source: Platts