Posted on 31 Jan 2023
The impact of a slowing global economy, lower output among the nation's carmakers, and integrated steelmakers adjusting upstream operations, is being blamed for the 7.4% slide in Japan's crude steel output during last calendar year to 89.23 million tonnes, the first decline in two years, according to new statistics published by Japan Iron & Steel Federation (JISF).
That last year's January-December total would come in below the 2021 result of 96.34 million tonnes was already clear by late summer last year, as Mysteel Global reported, but even then, the hope had been for the total to sneak in above the threshold of 90 million tonnes to give the sector a psychological boost.
The final result was not as grim as the 83.2 million t level recorded in 2020 when COVID-19 was raging globally but nonetheless, it marked only the third time since the 2008 global financial crisis that Japanese crude steel on a calendar year basis had dipped below the benchmark of 90 million tonnes.
By steelmaking process, steel made using the blast furnace-converter combination fell by a large 9.1% from CY'21 to total 65.4 million tonnes, as integrated mills adjusted upstream production to cope with falling demand, especially from the automotive sector that was struggling with component supply issues.
JFE Steel, Japan's second-largest integrated mill after Nippon Steel, stopped the No.6 blast furnace at the Chiba area of its East Japan Works near Tokyo last September for a relining and only restarted the unit earlier this month, as reported.
The fall-off in automotive-sector demand for steel is evident from the large declines in production of hot-rolled and cold-rolled coils and sheet, and galvanized sheets last year, the JISF statistics showed.
Orders for steel placed in November showed that bookings for steel for use in auto manufacturing were lower by 6.7% from October at 515,000 tonnes, as reported, and in mid-February when JISF tabled December orderbook data, chances are high the numbers will show another fall from November.
Steel made using electric furnaces also dipped last year, declining by 2.3% to 23.83 million tonnes, as demand for construction steel -- the dominant items of Japanese mini-mills -- softened with the decline in building activity.
The latest statistics released in late December by Japan's Ministry of Land, Infrastructure, Transport and Tourism showed that new building starts nationwide including housing and non-housing in November totalled 9.57 million square meters, down by 5.5% on year.
Indeed, among all the 24 carbon steel items that JISF tracks, production of all but four decreased year-on-year last year. Of the four -- H-beams, heavy sections, medium plate and sheet and heavy plate -- the on-year increase for the latter was the largest (albeit a small 3.6%) and lifted the total to 9.25 million tonnes.
Last year's rise in heavy plate production is curious because orders for these plates were dull, particularly towards the end of last year. Certainly, the largest consumers of heavy plates in Japan, Japanese shipbuilders, were not flooding steelmakers with orders.
Statistics released by Japan Ship Exporters' Association (JSEA) showed that during 2022, Japanese yards delivered only 177 vessels, equivalent to 8.34 million gross tonnes, lower by a large 16% from 2021.
Source:Mysteel Global
