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Japan’s JFE Steel raises forecast 2020-21 output

Posted on 12 February 2021

Japanese steel manufacturer JFE Steel has further raised its projected crude steel output for the April 2020-March 2021 fiscal year, encouraged by recovering demand in domestic and overseas markets.

JFE's crude steel output recovered to 6.27mn t during October-December 2020, up by 17pc from 5.38mn t for July-September. October-December output was also 0.5pc higher from a year earlier. JFE in September last year restarted one of its two closed blast furnaces because of recovering demand.

January-March output is expected to remain mostly steady from the previous quarter, prompting the company to revise up its 2020-21 crude steel output forecast to 22.7mn t. JFE originally expected crude steel output to fall by 20pc against the previous year to 22mn t for 2020-21 but raised its forecast to 22.5mn t in November last year.

Japan's domestic steel demand is continuing its recovery, with most user industries restoring their manufacturing operations from Covid-19 lows during April-June, JFE said. The company is also encouraged by higher overseas prices in the face of a firm demand recovery and tighter availability.

The gradual recovery in manufacturing demand, particularly from car manufacturers, has also prompted other Japanese steel mills to further restore their steel output.

Japan's biggest auto producer Toyota has revised up its 2020-21 domestic car output forecast to 2.9mn units, down by 10pc from a year earlier, compared with a previous 2.8mn units. A current semiconductor shortage is unlikely to force Toyota to significantly lower its car output as it holds sufficient stocks, the company said.

The shortage of semiconductor chips is casting a cloud over recovering auto production globally. Japanese auto producer Subaru was forced to temporarily halt domestic car output in January and reduced its 2020-21 output prediction to 520,000 units from an earlier-expected 556,000 units.

JFE Holdings, the parent company of JFE Steel, has revised up its 2020-21 financial outlook to a ¥38bn ($362mn) loss compared with a previous forecast of a ¥100bn loss, mainly because of the recovery in its steel businesses.

Source : Argus