Crude steel output in Japan hit 11-year low in April. The country produced 6.62mn mt of crude steel in 2020, down by 23.5pc from the prior-year period, according to World Steel Association data. From March 2020, crude steel output dropped by 16.8pc. Earlier, in May 2009, the global financial crisis had dampened demand. The decline of 23.5pc in April 2020 output is the highest drop seen since July 2009, according to the Japan Iron and Steel Federation.
Blast furnace production dropped by 25pc to 4.84mn mt from the prior year, while steel output from EAF‑based mills was 1.77mn mt, down by 18pc from April 2019.
A bearish outlook for H2 2020
Demand for finished steel in Japan took a hit amid COVID-19 spread globally in March-April, forcing leading steelmakers to cut their productions significantly, pointed the Japan Iron and Steel Federation on Friday. The industry expectations for the remaining months of 2020 are also bearish.
Japanese steelmakers could not produce meet their targetted production amid a significant drop in steel demand on the back of COVID-19. The state of emergency announced in steel production hubs led to a declined output.
Major steelmakers like Nippon Steel and JFE Steel temporarily shut three blast furnaces between the two in April to cope with a demand slump. Plans of idling four more blast furnaces in June and July are in the offing, cutting their capacity by 25pc-30pc. This could impact their short-term performance in the coming months.
In terms of downstream demand, a major automaker, Toyota Motors lowered its vehicle production in Japan with plans for cutting output further in June-July 2020. The company is expected to produce 5-12pc lesser units than forecast in April. Toyota had planned to produce about 180,000 and 250,000 units in June and July, respectively. In 2019, it sold over 1.5mn vehicles, up 2.6pc from the prior year, according to official statistics of Japan. But the situation seems bleak for 2020.
Ordinary finished steel production declined by 20pc to 4.73mn mt in April 2020. In the finished flat steel segment, HRC, CRC and galvanized productions decreased by 22.3pc, 24.1pc and 25pc, respectively, from the prior year.
In March 2020, a sharp drop in domestic steel demand had resulted in a rise in steel exports by 88pc to 4.2mn mt from a year ago.