Japanese steel output fell in October even amid rising demand

Steel production in Japan fell 1 percent in October YTD to 8.97 million tonnes, reflecting technical disruptions at some plants, even as demand from the auto and construction sectors remained strong.

In a seasonally independent environment, steel output as the world's second-largest producer after China rose 4 percent from September, the Japan Metals Federation said Monday.

“Production has declined since October 2016, when monthly output was the highest in a year, but demand for steel for automobiles, construction and civil engineering remains quite strong in Japan,” said a researcher in the federation.

Output from blast furnaces using iron ore and coking coal declined 3.5 percent in October, marking the sixth straight month. Production of electric arc furnaces using scrap metal rose 7.2 percent for the 13th straight month. The drop in overall production last month came after some factories temporarily shut down facilities.

JFE Steel, the second largest steel company in Japan controlled by JFE Holdings Inc, said in September that it would shut down blast furnaces at its East Japan plants due to technical problems, cutting annual production by about 300,000 tons. “The furnace was back to full operation by early November,” a JFE Steel spokesman said.

In October, the Ministry of Economy, Trade and Industry predicted that Japan's steel production will grow 0.4 percent in October-December from last year's level to 26.51 million tons.