Japan's METI clips steel output forecast for Jan-March
Though the result, if achieved, would also represent a 1.7% rise from January-March this year – and make for the third consecutive on-year quarterly increase – the total would nonetheless be still at the low level of under 22 million tonnes.
"Domestic demand is likely to remain at the same level, as there are concerns about a slowdown in some fields of industrial machinery that are subject to external demand, while sales for automobiles are recovering," METI said, but warned that "depending on trends in Europe and China, there is a possibility that steel consumption will decline."
Just days earlier on December 20, the Japan Iron & Steel Federation (JISF) had tabled its crude steel forecast for the coming fiscal year beginning next April, saying that it expected next fiscal's output to be flat from this fiscal's and that both domestic and export demand are expected to remain at the same level.
The JISF noted that crude steel output last fiscal declined to 87.84 million tonnes from 95.8 million tonnes in 2021, and industry watchers were quick to point out that based on METI's forecast for January-March output, full-year Fiscal 2023 crude steel production – and that for Fiscal 2024 – will fall below 90 million tonnes.
The country's crude steel output last month fell by 5.3% from October to 7.11 million tonnes, as Mysteel Global reported, which took April-November output to 58.39 million tonnes. Assuming that output this month will be around 7.2 million tonnes, adding METI's forecast for the coming quarter would put Fiscal 2023 output at about 87.6 million tonnes, indeed well below 90 million tonnes – again.
Moreover, METI, the JISF and various steel industry executives have said that just about the only bright spot in an otherwise rather mediocre year this year was the recovery in Japan's auto-manufacturing sector. However, the widening scandal at Toyota Group mini-car maker Daihatsu Motor after the Osaka-based maker was found to have falsified vehicle safety tests, could cause sales of automotive sheet and special steel to decelerate once again.
On Tuesday as METI was tabling its steel demand and supply forecast for next quarter, Daihatsu announced that it was suspending production at all its domestic plants while Japan's transport ministry conducts an investigation. The company usually makes about 4,000 vehicles per day in Japan – including some for Toyota – and has a network of more than 8,000 component suppliers, according to Japan's Kyodo News.
Written by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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