Japan's crude steel output climbs in August, but total still low

During August, the country's steelmakers -- both integrated mills and mini-mills -- lifted their production slightly, with converter steel output rising by 0.5% on year to 5.14 million tonnes and electric-furnace mills lifting their output by 0.3% to 1.52 million tonnes, the JISF numbers showed. The integrated mills' production was higher on year for a fifth consecutive month and EAF output higher for a second straight month.

"Orders for industrial machinery continued to recover, mainly from external demand, and automobile production maintained a moderate recovery trend," industry daily, Sangyo Shimbun commented, adding that while demand in the construction sector is sluggish, there are signs that the market is bottoming out.

Output of H-beams -- mostly used in steel frame construction -- jumped by 5.5% on year during August to 239,300 tonnes, for example, although production of rebars was lower by 12.6% at 405,100 tonnes, the JISF numbers showed.

But while some steelmakers such as Nippon Steel and Kyoei Steel have both commented recently that they expect delayed redevelopment projects in metropolitan areas to move forward from next fiscal year from April, the Sangyo is skeptical.

The daily quotes a blast-furnace executive as saying that so long as material costs, labor shortages, and rising interest rates keep suppressing demand, and the impact of China's economic downturn and Middle East situation is prolonged, "crude steel production is likely to remain low."

Notably, daily crude steel production in August averaged 215,000 tonnes, down about 4% from July, and on an annualized rate, at a very low 78 million tonnes. Were that to be around the actual level for this fiscal, it would be the lowest since fiscal 1968 at the start of Japan's steelmaking boom when output that year reached 68.97 million tonnes, Mysteel Global notes.

Moreover, there is a likelihood that September volume will show a contraction -- though this time, because of natural causes rather than market forces.

Japan's two largest integrated steelmakers Nippon Steel and JFE Steel, together with several smaller mills, are still cleaning up after parts of their works closest to Tokyo were flooded when Typhoon Dujuan inundated the region early last week.

Nippon Steel had temporarily suspended all upstream and downstream operations at its Kimitsu works in Chiba prefecture on September 21 as the typhoon approached, and the company didn't recommence operations until September 24.

"Downstream equipment is scheduled to resume sequentially, but full restoration is expected to take some time," according to industry sources. Some parts of the works were flooded but the company is not providing details.

Meanwhile, the Funabashi plant of JFE Steel's East Japan Works, also in Chiba, suffered considerable damage, with the impact worsened by the fact that the mill was still recovering from unseasonable rains a few weeks earlier in August. The double blow has prompted JFE to estimate at least a 600,000 tonne loss in production.

"Because additional damage occurred while restoration from the heavy rain in August was still underway, we announced this estimate as the impact is expected to expand and persist longer, resulting in a larger production reduction," JFE Steel CEO Masayuki Hirose told Japanese media on September 25.

No specifics were given but Hirose did say that operations on the Chiba blast furnace had been only "partially restored" after August and "efforts toward restoration remain underway."

The last remaining furnace at Chiba is the No.6 which has an inner volume of 5,153 cu m and produces about 10,000 tonnes/day. On September 21, Chiba had recorded 392.5 mm of rain in just 24 hours.

Hirose is also chairman of the JISF and at Friday's press conference, he was asked that in light of recent typhoons, earthquakes and other disasters, whether the steel industry plans to strengthen its disaster preparedness.

"We have already been taking measures based on certain assumptions, (but) as the torrential rain in August and the heavy rain associated with Typhoon No.25 (Dujuan) exceeded those assumptions, we want to review our assumptions again and take appropriate measures," he said.

The steelmakers might be wise to hurry that review along. The Japan Meteorological Agency says another typhoon -- the 26th this season and named Typhoon Surigae -- will move up the East Japan coast this week and will bring more rain and strong winds to Tokyo and Chiba by September 30-October 1.

Japan's January-August 2026 production of carbon steel items (selected)

Unit: Tonnes; Source: JISF

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com