JISF: Japan Apr-Jun steel demand under severe challenge
As for July-September, it is still too early to estimate, but Kitano reminded all steel producers to monitor the domestic steel demand closely and plan their production cautiously.
A JISF official interpreted the message from JISF as a warning to the Japanese steel producers of the risks of high steel stocks.
“Since we have never experienced such a situation that has caused by the COVID-19 crisis, we have no idea how long it will affect the operations of the steel consumers, especially manufactures and construction sectors, so our the steel mills need to act cautiously and the priority is not to produce too much,” he said.
JISF’s tone matched the estimation released by Japan’s Ministry of Economy, Trade & Industry on April 9, anticipating the country’s crude steel demand over April-June to drop 25.9% on year and down 17.9% on quarter to about 19.4 million tonnes, or the first time for the country to see its steel demand below the 20 million tonnes benchmark in 11 years.
The ministry, added, though, that impact of the COVID-19 contagion on the business had been only “partially” considered when making the forecast, as reported.
Japan’s top integrated mills such as Nippon Steel and JFE have already taken measures including banking their blast furnaces to reduce output, as Mysteel Global reported, which may reduce the country’s crude steel output by 1.3 million t/month, Mysteel Global calculated basing on the available information.
However, they still need to be mindful of whether their production reduction has been sufficient to match the decline in demand, according to a Tokyo-based steel trader.
“They may need to be prepared to take further actions if necessary, as we can sense that the Japanese economy is slipping rapidly, and the steel demand slump could be something we have never experienced, and the actual crude steel demand for this quarter may be below 19 million tonnes,” he added.
Japan’s largest integrated mill - Nippon Steel - has banked its 5,370 cu m No.1 blast furnace at the Kashima section of its East Japan works since April 15, and it plans to bank the 3,700 cu m No.1 furnace at the Wakayama section of Kansai steel works by end-April, as reported.
The company also plans to bank the No.2 furnace (4,500 cu m) in the Kimitsu section of its East Japan works from mid-May. JFE Steel, the second largest integrated mill, decided to start relining No.4 units (5,005 cu m) at Kurashiki section of West Japan Works from end-April which was initially planned to start relining from September 2021, also decided to bank No.4 unit (5,000 cu m) at Fukuyama section of West Japan Works from late-June as previously reported. These furnace stoppages could cut about 1.3 million tonnes/month of crude steel production, (we have reported all these, can put in a table)
Steel producer |
Blast Furnace |
Banking Date |
Nippon Steel |
No.1 BF at Kashima |
April 15 |
Nippon Steel |
No.1 BF at Wakayama |
End-April |
Nippon Steel |
No.2 BF at Kimitsu |
Mid-May |
JFE Steel |
No.4 BF at Kurashiki |
End-April (reline) |
JFE Steel |
No.4 BF at Fukuyama |
Late-June |
Written by Yoko Manabe, yoko.manabe@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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