Japan's FY25 crude steel output hits near 60-year low

• FY25 Output hits 57-year low amid persistent declines
  
  
• Weak demand and export pressures weigh on production
  
  

Mysteel Global: Unfortunately for Japan's Ministry of Economy, Trade and Industry (METI), its prediction for crude steel production last December has proven grimly accurate, with early industry data showing the country recorded its lowest crude steel output volume for a fiscal year in 57 years.

Preliminary data issued on Wednesday by the Japan Iron and Steel Federation (JISF) showed that for the fiscal year ended March 31, crude steel output reached 80,330,500 tonnes, down by 3.2% from the previous year and exactly in line with METI's December 23 forecast, as Mysteel Global reported. It was also the fourth consecutive year of decline.

The total was about 2.5 million tonnes lower than the previous low, recorded in fiscal 2020 when the ravages of COVID on the Japanese economy pushed output down to 82.78 million tonnes. Prior to that, the lowest was the 68.97 million tonnes recorded in fiscal 1968 at the start of Japan's steelmaking boom. A year later in 1969, output had leapt to 82.17 million tonnes.

During last fiscal, crude steel produced via the blast furnace-BOF route fell by 3% on year to 59.52 million tonnes, while output of electric furnace steel declined by 3.6% to 20.81 million tonnes, both lower for the fourth consecutive year, the JISF statistics show. The ratio of electric furnace steel in total output was 25.9%, almost level with the previous fiscal's ratio of 26%.

Multiple negative factors were already weighing on the Japanese industry last year, but the wide-spread market ructions caused by the recent outbreak of hostilities in the Middle East have only intensified the difficulties the Japanese mills faced.

"Demand for automobiles and industrial machinery for example has recovered slightly, but external demand has been sluggish due to the impact of US tariff policies and the sluggish Chinese economy," Japan's Sangyo Shimbun reported, noting that Japanese direct and indirect steel exports were impacted by China's steel export blitz.

"Amid concerns about a downward trend in demand due to the deterioration of the situation in the Middle East, the steel market outlook is severe both domestically and internationally, and crude steel production is expected to remain at a low level during the current fiscal," the Sangyo warned.

JISF chairman and Nippon Steel president, Tadashi Imai, was similarly perturbed. "If the de facto blockade of the Strait of Hormuz is prolonged, there is a high possibility that Chinese steel products that cannot be exported to the Middle East will flow into Japan and Southeast Asia," he told Japanese media. "There are concerns about the negative impact on the steel market," he observed.

Note: This article has been written in accordance with a content exchange agreement between Mysteel and BigMint.