Japan Raw Steel Output to Rises by 3.7% in April-June

Japanese makers plan to increase raw steel output by 3.7% to 27.538 million tonnes in April-June from January-March, announced by Ministry of Economy, Trade and Industry on Monday. The output increases for the first time in 3 quarters and hits 27 million tonnes for the first time in 5 quarters due to higher export and rebuilding of in process stock. The output is 1.438 million tonnes higher than demand outlook by METI as of March end due to higher demand of automobile. METI warns Japanese steel makers should be cautious for situations including foreign exchange rate.

The output of steel products increases by 2.7% to 24.384 million tonnes in April-June from January-March while METI expected 2.8% lower demand in March. The output of carbon steel products increases by 4.0% to 19.117 million tonnes while METI expected 2.6% lower demand.

The output of carbon steel products decreases by 0.8% to 12.167 million tonnes for domestic market in April-June from January-March. METI sees the production plan is high for 5.5% lower demand outlook despite of increasing demand. The output decreases by 4.3% for integrated steel makers due to lower demand for shipbuilding plate and lower sheet demand for seasonal slow automobile production. The output increases by 5.5% for electric furnace steel makers due to firm building demand for small bar, H-beam and sheet steel.

The output of carbon steel products increases by 9.9% to 6.95 million tonnes for export in April-June from January-March. The integrated steel makers increase the output by 8.9% due to higher sheet steel demand under recovering demand from Thai flood impact, better Asian steel price and lower yen rate. The electric furnace steel makers increase the output by 40.1% due to better export condition for small bar and sheet steel.

Japanese makers increase H-beam output by 8.3% to 988,000 tonnes in April-June from January-March. They increase the small bar output by 6.7% to 2.435 million tonnes.

METI warns Japanese makers should adjust the production depending on yen rate while the makers planned the aggressive output in lower yen rate in early April. METI expects Japanese steel makers prepare for downside risk under still high steel inventory and delayed construction activity caused by labor shortage.

Japanese output of special steel products decreases by 1.8% to 5.267 million tonnes in April-June from January-March. The output decreases for the first time in 4 quarters due to seasonal slow automobile demand and lower demand for construction machinery. The output decreases by 3.7% to 3.399 million tonnes for domestic market while the output increases by 1.7% to 1.868 million tonnes for export.