Japan’s Ministry of Economy, Trade and Industry forecasts steel production in Japan to fall 27.9% to 11-year lows in July-September as the coronavirus pandemic continues to put pressure on demand from key buyers such as automakers …
“We don’t know if production and demand will reach this quarter as coronavirus cases in Japan and abroad are still on the rise,” Tomoya Hasui, director of METI’s metal industry, told a news conference.
According to the ministry’s estimates, steel production in July-September amounted to 17.70 million tons, compared with 24.55 million tons a year earlier. The previous eight quarters also saw a decline on an annualized basis.
Steel production in the world’s third largest steel producer is forecast to decline to 18.29 million tonnes in April-June from 26.12 million tonnes a year earlier, falling short of METI’s April 19.36 million tonnes forecast.
Estimated production for the current quarter is down 3.2% from the previous quarter and will be the lowest since January-March 2009 during the global financial crisis.
According to the ministry’s forecasts, demand for metal products, including exports, will decline by 24.3% from a year earlier to 17.28 million tons in July-September, the ministry said citing an industry review.
Steel used for automobiles, shipbuilding and industrial engineering will be hit hardest, falling 24-33% from a year earlier.
Exports are forecast to decline 28.6% to 5.3 million tons, the lowest since April-June 2009.
To cope with falling demand, metallurgists are cutting production.
Japan’s two leading steelmakers, Nippon Steel Corp and JFE Steel, owned by JFE Holdings Inc, have announced plans to temporarily shut down a total of seven blast furnaces by the end of July, cutting capacity by 25% to 30%.