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Japan Jan-March crude steel output may fall on glitches at some mills

Date: 2019-10-29
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Japan’s crude steel output for the January to March quarter is expected to fall from a year earlier due to troubles at some steel plants, despite steady local demand from automakers and other manufacturers, the industry ministry said on Thursday.

The Ministry of Economy, Trade and Industry (METI) estimated crude steel output of the world’s second-biggest producer would drop to 26.31 million tonnes for the three-month period, down 0.4 percent from a year earlier. This would mean a third consecutive quarterly decline.

Demand for steel products, including those for exports, is forecast to decline 1.1 percent to 23.59 million tonnes in the January to March quarter, although domestic demand would likely stay flat at 16.15 million tonnes, the ministry said, citing an industry survey.

Exports, which typically account for about 40 percent of Japanese steel production, are forecast to slip 3.2 percent from a year ago during the period, the ministry said.

JFE Steel, Japan’s second-biggest steelmaker, is having trouble at a blast furnace in Kurashiki steelworks in western Japan and another furnace in Chiba, near Tokyo, which are expected to cut its crude steel output for the year to March 2019 by 500,000 tonnes in total from its October estimate, a company spokesman said.

In October, JFE cut its annual crude steel forecast to 28 million tonnes from 29 million tonnes, due to severe rains in July and September and technical trouble at the furnace in Kurashiki.

“A recovery in the Kurashiki plant will be delayed by about a half month from an earlier plan of late December while the furnace in Chiba is also expected to be back in normal operation in mid-January,” the spokesman said.

Japanese steelmakers are enjoying healthy local demand from automakers and the construction sector, which has been in full swing for the 2020 Tokyo Olympics, but a series of glitches at their aged facilities have prevented them from producing as much steel as they had wished.

For the current financial year to March 2019, the ministry forecast the country’s crude steel output would fall for a second year to 104.39 million tonnes, against 104.84 million tonnes a year earlier.

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