Japan’s crude steel production is forecast to decline to about 23.24mn mt in Q1 (April-June) down by 1.8pc from Q4 FY2020 according to the Ministry of Economy, Trade and Industry (METI). A resurgence of COVID-19 has dented sentiments further slowing the economic recovery. METI released a forecast on April 13 indicating that the resurgence of COVID-19 has dented sentiments further slowing the economic recovery.
In Q1 FY21, crude steel production could witness over a 28pc rise from Q1 FY2020. Steel demand had plunged with over 15 blast furnaces shut amid the first outbreak of the pandemic, last year.
Finished steel demand could rise by 20.6pc from the prior-year quarter but dip by 2.1pc from the Q4. End users are hopeful of a gradual improvement in the demand in the next nine months. Steel demand in both domestic and export markets continues to strengthen and is expected to stay stable.
The Japanese government has instilled a major stimulus to boost the economy in FY2020. After robust economic activities in the January-March period, the last quarter of the fiscal year both the construction projects and manufacturing could slow down in Q1 FY2021.
In the domestic market, demand for carbon steel from the construction sector in Q1 could drop by 2.3pc from Q4 FY2020 or fall by 1.5pc from the prior year to about 4.55mn mt. Consumption from manufacturers may drop by 4.1pc from the prior quarter but is forecast to gain 25pc from the prior year to 5.96mn mt, offering some relief to steelmakers.
($1=JPY108.9)