Dec 22, 2020
Japan’s 2020-21 steel output to fall to 52-year low
2021-01-14
Japan's domestic crude steel output will fall by 16pc on the year to 82.5mn t in the April 2020-March 2021 fiscal year, to its lowest level in 52 years since 1968-69, in a prediction by the country's trade and industry ministry (Meti).
Meti today said that the country's January-March 2021 crude steel output is likely to further recover to 23.5mn t, compared with 21.9mn t expected in October-December 2020. Japan's 2020-21 crude steel production is expected to remain below 100mn t for a second consecutive year after steel mills were forced to lower output because of economic and manufacturing slowdowns from the Covid-19 pandemic.
Industry group the Japan iron and steel federation last week said the country's crude steel output could recover to near 90mn t in 2021-22 but is likely to stay below 100mn t for a third straight year. Japan's crude steel output declined to a 10-year low of 98.4mn t in 2019-20.
Output is likely to fall below 2019-20 levels and to the lowest since 69mn t in 1968-69. Japanese steel output sharply increased over the 1960s to reach 87mn t in 1969-70, compared with just above 20mn t in 1960-61, and above 100mn t in the early 1970s to fuel rapid economic growth.
The ministry forecast demand for steel products to decline by 3pc on the year to 21mn t in January-March, pressured largely by weak export demand. Domestic steel demand is expected to edge down by 2pc to 14mn t, while export demand is likely to drop by 7pc to 7mn t.
Meti expects a continued steel demand recovery from the manufacturing sector in January-March. But demand from the construction sector is predicted to stagnate after many companies delayed investment plans because of the Covid-19 pandemic.
January-March demand is expected to remain pressured by an increasing number of Covid-19 infections in the country. The number of Covid-19 cases in Japan exceeded 200,000 on 21 December, forcing many local governments including major cities of Tokyo, Osaka and Nagoya to step up restrictions on people's movement over the new year holiday.
By Rieko Suda
Source: Argus
