Japanese crude steel production in the past three quarters fell back to levels not seen since 2009 as the industry grapples with downstream manufacturing and construction worksite closures brought about by the coronavirus pandemic, compounding issues faced through existing tepid domestic demand and export opportunities.
Production in the first quarter totaled 24.4 million mt, up 2.9% from the fourth quarter but down 2.4% year on year, according to the Worldsteel Association.
The prospects for the second quarter are no better, as the nation's steel industry continues to reel from the effects of the coronavirus pandemic.
"We're seeing contracting markets at home and overseas," a Japanese trader said. "It's only going to get worse in the second quarter as we will see the planned production cuts from major blast furnaces take place."
Major producer JFE steel said in March that the operating environment was unprecedented and extremely challenging, particularly weighed down by the slump in demand from manufacturing industries due to US-China trade tensions, rising raw material prices led by China's increased needs, and the rising cost of other materials used in production and logistics.
Since the third quarter of last year production volumes have been kept at bay as the nation saw falling demand both domestically in the export markets, with the Tokyo Olympics construction boom over and facing more competitive and restrictive export opportunities.
Source: SEAISA
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