Japan's steel production to fall to 52-year low in 2020-2021

Japan's crude steel production will fall 16% year-on-year to 82.5 million tonnes between fiscal April 2020-March 2021, the lowest level in 52 years since 1968-1969, according to the forecast by the Ministry of Trade and Industry country (Meti).

Meti said today that the country's steel production in January-March 2021 is likely to rise to 23.5 million tonnes, up from 21.9 million tonnes expected in October-December 2020. Steel production in Japan is expected to remain below 100 million tonnes per year in 2020-2021. for the second year in a row after steel mills were forced to cut production due to the economic slowdown and production slump due to the Covid-19 pandemic.

The industry group Japan Ferrous Metals Federation said last week that the country's crude steel production could grow to nearly 90 million tonnes in 2021-2022, but is likely to remain below 100 million tonnes for the third consecutive year. Steel production in Japan fell to a 10-year low of 98.4 Mt in 2019-2020.

Production is likely to fall below the 2019-20 level. And to the lowest level from 69 million tons in 1968-1969. Steel production in Japan increased sharply during the 1960s, reaching 87 million tonnes in 1969-70, up from just over 20 million tonnes in 1960-61. And over 100 million tons in the early 1970s, which contributed to rapid economic growth.

According to the ministry's forecasts, demand for steel products will decline by 3% on an annualized basis to 21 million tons in January-March, mainly under pressure from weak export demand. Domestic steel demand is expected to decline 2% to 14 million tonnes, while export demand is likely to fall 7% to 7 million tonnes.

Meti expects continued recovery in steel demand in the manufacturing sector in January-March. But demand in the construction sector is forecast to stagnate after many companies have postponed investment plans due to the Covid-19 pandemic.

In January-March, demand is expected to remain under pressure from the growing number of Covid-19 cases in the country. On December 21, the number of Covid-19 cases in Japan surpassed 200,000, forcing many local governments, including the major cities of Tokyo, Osaka and Nagoya, to tighten restrictions on the movement of people during the New Year holidays.