Posted on 28 Apr 2021
Japan’s steel value chain including steel producers and end-users expects little impact of the third state of emergency on their operations, even though the latest partial lockdown will be running over April 25-May 11, affecting Tokyo, Osaka, and Kyoto and Hyogo in western Japan.
The latest round of partial lockdown will probably result in minor impact on the steel production, just as the second round over January 8-March 21, and the domestic steel mills will continue to ramp up their output to satisfy the firm demand from the domestic manufactures, market sources shared.
A director from an electric-arc-furnace steel producer anticipated the impact on the domestic manufacturers or construction sector to be minimal too.
“Domestic steel supply is rather tight, and we have not heard that any manufacturers will trim their output, or any general contractors will slow down their construction projects over the latest state of emergency,” he said with confidence, adding, “we, thus, expect their steel consumption to be stable, no concern about declines.”
Besides, more people staying home to slow down the virus spread may lead to greater demand for steel via some product such as electrical and electronics consumer goods, he added.
Large retail outlets such as department stores and electronics shops are forced to close during the third state of emergency, but their sales will continue as consumers can order online, and people that need to work remotely from home will also need to buy some electronics products, according to him.
Despite two rounds of lockdowns in the FY2020 (April 2020-March 2021), the country’s white goods sales totalled Yen 2.52 trillion ($23.42 billion), up 2.8% on year, according to the data by the Japan Electrical Manufacturers’ Association.
A public relation official from Toyota Motor, Japan’s largest automobile maker, also confirmed that the company has no plan to trim auto output over the third state of emergency, just asking more employees to work from home.
A salesman from an automobile retailer in Tokyo confirmed no shop shut-downs for the third round either, just as in the second state of emergency.
“We do not expect any auto sales decline this time, as we have taken enough precautious measures and customers can shop with no worries of the infection,” he said, adding, though, that the global shortage of auto semi-conductors may slow down auto production.
The Japanese automakers have been struggling with the chips shortage since early January, and Renesas Electronics Corp, Japan’s leading semi-conductor producer, will only be able to run at its full capacity sometime in May after the resumption of operations on April 17, nearly one month after the halt due to a fire accident.
A Tokyo-based scrap trader appeared rather relaxed about the third state of emergency too, hearing no construction activities to slow down so far.
“Many holidays fall in the period of the third state of emergency, and scrap generation from construction sites will decline anyway because of the holidays, other than these, scrap generations will just run as per normal during the latest lockdown,” he said.
Japan will be having the Golden Week holiday over April 29-May 5.
So far, Japan’s first state of emergency over April 7-May 25 2020 with all Japan affected since April 16 has been the only one to have hit the country’s steel value chain severely, as the country’s crude steel production over April-June 2020, as a result, slumped 30.6% on year and 24.9% lower on quarter to about 18.1 million tonnes, as reported.
Over January-March when the second state of emergency was imposed, the country’s steel output fell 1.7% on year but up 7.6% on quarter to about 23.7 million tonnes, according to the data by the Japan Iron & Steel Federation.
Source:Mysteel Global
