Japan Expects Steel Demand To Fall 2.4% Year-on-year in The Second Quarter

According to the latest data released by the Ministry of Economy, Trade and Industry of Japan, it is expected that Japan's steel demand in the second quarter (April-June) will drop by 2.4% year-on-year to 19.97 million tons. The main reason is that there are risks in the supply of components in the manufacturing industry, especially semiconductor chips. In addition, economic uncertainty in other countries and the conflict between Russia and Ukraine will also affect Japanese steel exports. The Ministry of Economic Affairs expects Japan's steel exports in the second quarter to be 6.59 million tons, a year-on-year decrease of 8.4%; crude steel output is 21.92 million tons, a decrease of 4.6% from 22.98 million tons in the same period of the previous year.

It is estimated that Japan's manufacturing industry will demand about 5.99 million tons of steel in the second quarter, a year-on-year increase of 5.7% and a month-on-month decrease of 2.2%. The year-on-year increase is due to a low base. In the second quarter of 2022, the national manufacturing steel demand was 5.67 million tons, a year-on-year decrease of 8.1%.

The Ministry of Health, Labor and Welfare said there were signs that production constraints in Japan's auto industry due to parts shortages were gradually improving, but risks remained.

Due to weak demand, the Japanese Ministry of Economy, Trade and Industry expects that Japan's construction steel demand will also drop to 4.67 million tons in the second quarter of 2023, a year-on-year decrease of 0.7%. Japan's Ministry of Economy, Trade and Industry is pessimistic about the demand outlook for the domestic steel market in the second quarter as Japanese steelmakers try to raise product prices amid rising energy and raw material costs. For example, Tokyo Steel raised its April ex-factory prices for structural steel products such as H-beams and I-beams in March, the first increase in six months.