Steel demand in Japan will grow by 12% in October-December

Japanese demand for crude steel is expected to rise 12% quarter-on-quarter to 21.1 million tonnes in October-December, according to a forecast released Oct. 7 by Japan's Ministry of Economy, Trade and Industry (METI). adjust steel production accordingly to meet greater demand from end users.

However, the volume, including carbon steel and special steel, is still 10.7% lower than last year, as the negative impact of the COVID-19 pandemic still exists, according to the report. METI officials in charge of the forecast were not available for further comment on Friday.

Sources in the Japanese steel market were not surprised by the forecast, agreeing with the expectation of a rise in domestic steel production on a quarterly basis.

"Japanese carmakers, as the main consumers of steel, have already started to increase production since July, and domestic mills have raised their targets, so actual production will gradually increase," a trader from Tokyo explained.

Nippon Steel, the largest mill in Japan, announced on October 6 that it will restart its 4,500 cubic meter blast furnace # 2 at East Nippon Works' Kimitsu site by the end of November.

JFE Steel, the second largest mill in Japan, may shortly after restarting on 26 August reach full capacity of its 5,000 cubic meter blast furnace at its Western Japan plant following a restart on 26 August, Mysteel Global understands.

In terms of finished steel, Japan's carbon steel consumption by the construction sector is expected to fall 3.7% from July to September and 11.4% year-on-year to about 5.2 million tonnes in October-December, while how the volume of producers could grow by 5.2% over the previous year. according to METI, a decrease of 9.7% over the same period last year to 6.4 million tons.

The ministry said in a statement that a stable demand from civil engineering is expected, but construction of buildings may stall due to steel consumption due to the persistent negative impact of the pandemic.

However, Japanese demand for specialty steel is expected to rise 24.7% quarter-on-quarter to about 2.9 million tonnes in October-December, although still 11.5% lower than last year.

A steel trader in Nagoya explained that the higher demand for specialty steel is driven by higher demand from the domestic manufacturing industry, especially the automotive sector.