Exciting Forecast: Japan's Q4 Steel Production Up 4.3% YoY!

Japan's Steel Industry: 4.3% Growth Forecast

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Japan's crude steel production is poised for a robust 4.3% upswing in the upcoming October-December quarter, according to the Ministry of Economy, Trade and Industry (METI), underpinned by a revival in automobile manufacturing. This forecast marks the second consecutive quarterly expansion, with METI projecting a total output of 22.33 million metric tons for the period, up from 21.41 million tons compared to the previous year. Furthermore, a 1.7% increase from the preceding quarter is also on the horizon.

While the demand for steel products, including those earmarked for exports, is expected to dip slightly by 0.6% to 20.50 million tons in October-December year-over-year, METI anticipates a 1.6% surge in exports.

Daisuke Matsuno, Director of METI's Metal Industries Division, noted, "Domestic steel demand for automobiles is likely to remain robust thanks to improved semiconductor supply, but other manufacturing sectors and the construction segment may continue to exhibit weakness."

Japanese automakers, including industry giants like Toyota Motor and Honda Motor, have witnessed a resurgence in production this year as the chip and parts supply constraints have alleviated. This projected upswing in crude steel output also reflects the slower production levels in the previous year, primarily due to maintenance activities at certain blast furnaces.

Despite the anticipated growth in steel exports for the quarter, the overall trend remains cautious, as steel prices in other Asian markets are expected to remain subdued due to lackluster demand in China, as Matsuno explained.

Last month, Yoshihisa Kitano, Chairman of the Japan Iron and Steel Federation, voiced expectations that crude steel output would remain below 90 million tons in the fiscal year ending next March due to weak domestic demand stemming from the construction and other sectors.

Source: Reuters (Reporting by Yuka Obayashi)