Japan Raw Steel Output to Rise by 0.7% in July-September, METI

Japanese raw steel output will increase by 0.7% or 193,000 tonnes to 29.16 million tonnes in July-September from April-June, announced by Ministry of Economy, Trade and Industry on Tuesday. The output is 1.3% or 387,000 tonnes higher than 28.87 million tonnes of demand estimated by METI. The output reaches 29 million tonnes for the first time since April-June 1980.

The output in July-September will increase by 4.8% from same period of 2005. Japanese integrated steel makers increase the output by 900,000 tonnes from April-June to build inventory preparing for blast furnace relining while the demand is firm for domestic construction, shipbuilding and automobile along with the export to Asia. The integrated steel makers will keep the high level output to meet firm demand though they try to reduce domestic sheet steel inventory. The electric furnace steel makers will reduce the output by 700,000 tonnes due to planned maintenance. The special steel products output is 5.26 million tonnes renewing former record.

The raw steel output in July-September is 3rd high as the quarter after the output in 1973 and 1974. The output will reach 29 million tonnes for the quarter for the first time since July-September 1974.

METI reported the high level output plan reflects firm actual demand. However, METI warns Chinese rapid output increase could impact on other market including USA, Europe and Asia when China produces steel at extra high pace of annualized 450 million tonnes and US steel inventory increases. METI said the point is if domestic hot, cold and coated sheet steel inventory would decrease to less than 4 million tonnes in July-September through balanced output and sales by steel makers citing the sheet steel inventory increased after July-September 2005.