Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The Japanese Ministry of Trade and Industry (METI) anticipates that domestic crude steel output will fall by 16pc to 82.5mn mt in The fiscal year 2021 (April 2020-March 2021) from the prior year. This will be the lowest level since 1968-69. Weak demand and economic slowdown due to COVID-19 hit manufacturing activities. FY 2021 could mark the second consecutive year with production below the 100mn mt.  

JISF believes that in FY 2021-22, the output could reach 90mn mt, below the 100mn mt mark for the third year. 


As production ramps up, METI expects Japan’s Q4 FY 2021 to reach 23.5mn mt, up from 21.9mn mt estimated in Q3. The ministry forecasts, in Q4 total steel demand in the country, could decline by 3pc to 21mn mt due to a fall in exports. Domestic steel consumption could be around 14mn mt, down 2pc, and export at 7mn mt, down 7pc from the prior-year quarter. 


Many Japanese companies have altered investment strategies to match supply-demand dynamics. Demand from the construction sector could take a long time to recover. COVID-19 cases in Japan crossed 200,000 on Dec 23 with restrictions on the movement of people and material during the new year holidays. Thus, demand in Q4 could remain under pressure. 


Crude steel recovered in November 

In November, crude steel production was 7.26mn mt, up 0.9pc from the prior month, but down 5.9pc from November in the prior year. In the machinery sector, the capital investment could increase a little, with demand for steel products picking up in the auto and construction sectors, JISF states.


Crude steel production through electric arc furnaces was up 4.3pc to 1.98mn mt. Through blast furnaces, stood at 5.29mn mt, down by 0.3pc from the prior month and 7.5pc from the prior year. Electric furnace steel production decreased for the 21st consecutive month in November from the prior-year period.


Pig iron production declined for the ninth month in November. Output stood at 5.135mn mt, up 0.4pc from the prior month but down 11.6pc from November 2019. 



Production of ordinary steel increased 0.2pc from the prior month to 5.74mn mt and dropped 2.5pc from Nov 2019. Special steel increased 3.8pc from October to 1,524,000mt but decreased 16.6pc from Nov 2019.Ordinary steel production decreased for the ninth month compared to the respective months in the preceding year. Special steel output decreased for 24 successive months, compared to the respective prior-year periods. 

In the flats segment, production of HRC and CRC increased by 2.8pc and 5.4pc from October. Production of hot rolled steel increased by 1.1pc from October to 6.533mn mt, but down 6.2pc from November 2019, a year-on-year drop for 29 straight months. 


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