Posted on 26 Jul 2024
Weak demand, especially from the country's construction and manufacturing sectors, is being blamed for the 2.6% on-year decline in Japan's crude steel output during January-June this year to 42.7 million tonnes, with output during June alone falling by 4.2% on year to 7.02 million tonnes and marking the fourth consecutive on-year monthly decline, preliminary statistics released by the Japan Iron & Steel Federation (JISF) show.
"Construction projects have been delayed or reviewed due to high material prices and labour shortages, and both construction and civil engineering are sluggish," the JISF observed. Steel orders for construction in May – comprising those issued directly by construction firms and those placed via dealers – accounted for 58% of Japan's total ordinary steel consumption, JISF data show.
Daily crude steel production in June averaged 234,000 tonnes, an increase of about 3,000 tonnes from May, but still low at an annualized rate of around 85 million tonnes, the JISF statistics show.
By production route last month, crude steel produced via the blast furnace-converter process decreased by 3.7% from June last year to 5.13 million tonnes – lower on year for a fourth successive month – while that made using electric-arc furnaces (EAF) fell by a larger 5.5% on year to 1.9 million tonnes for a third straight on-year decline. Compared with May, EAF output last month was up fractionally (just 0.6%) as mini-mills reinforced product inventories ahead of their usual summer maintenance stoppages, one source observed.
By steel type, production of ordinary steel last month decreased by 3.6% on year to 5.48 million tonnes while that of specialty steel declined by a larger 6.2% to 1.54 million tonnes, both of which were lower on year for the fourth successive month.
The decline in speciality steel output in June meant that the January-June total was 2.6% down on-year at 7.623 million tonnes. A large proportion of special steel items are used in automotive applications – such as wire rods for fasteners and suspension springs – and demand for special steel has suffered due to the impact of quality and certification fraud issues.
Earlier this year, production at Toyota Motor Group, Japan's largest automaker, was disrupted when news emerged that it, together with Toyota Group members Daihatsu Motor and Toyota Industries, had falsified safety tests and inspections data, prompting the Japanese government to order a thorough review of their operations, as Mysteel Global reported.
According to industry daily the Sangyo Shimbun, Toyota is telling its network of parts suppliers that its domestic production in October will average just over 14,000 units per day while its plan for November and December is expected to be higher than 14,000 units/day.
"However, the nearby outlook is uncertain since unstable production continues," the daily reported, adding that "Toyota's August production plan is being revised significantly downward and some production lines are being suspended short-term." On July 23, Toyota announced that it was suspending operations on five vehicle production lines at three domestic plants due to a parts shortage.
Japan's first half 2024 production of carbon steel items (selected)
Product | January-June | % chge YoY |
H-beams | 1,602,600 | -11.4% |
Small bars (incl rebars) | 3,565,200 | -4% |
Wire rods (ordinary) | 199,900 | -2% |
Heavy plates | 4,324,600 | -2.8% |
Hot rolled coils | 17,789,100 | -2.4% |
Cold rolled coils | 6,942,600 | +0.3% |
Galvanized sheets | 4,109,600 | -3.9% |
Welded/seamless tubes | 1,560,200 | -1.9% |
Unit: Tonnes
Source: JISF
Source:Mysteel Global
