Japan Raw Steel Output to Reach 90 Million tonnes in F2009

Japanese raw steel production could reach 90 million tonnes in fiscal 2009 ending March 2010. The production is expected to exceed 23 million tonnes in July-September when domestic steel makers plan to increase the production to meet higher demand for automobile and export while the production was 19.1 million tonnes or annualized less than 80 million tonnes in April-June. An integrated steel maker’s official expects the production could reach 24 million tonnes in October-December when domestic automobile production will recover and Chinese demand keeps firm.

The production was 40-year low at 19.1 million tonnes in April-June, which was 36.7% lower than same period of 2008. The production will be 23.07 million tonnes in July-September, according to Ministry of Economy, Trade and Industry. The production increased by 11% to 7.66 million tonnes in July from June and the output is expected to increase in and after August.

Domestic steel demand is very slow for construction application. The demand is also very slow for construction and industrial machinery while the shipbuilding demand slows down from the peak. The raw steel output is supported by higher demand by automobile and higher offshore demand in Asian countries.

The raw steel output could reach 48 million tonnes in second half of fiscal 2009 while the production would be 42 million tonnes level in the first half. The production is recovering from the bottom of annualized less than 80 million tonnes level in the bottom.

However, the demand is uncertain especially for offshore market. Japanese industry interest concern Chinese steel demand could peak out from the record level due to the potential overproduction. Japanese steel makers try to keep balanced supply by keep reducing the production level to the actual demand.