Japan's crude steel demand is expected to reach 20.67 million mt in October-December 2026, up 2.3 percent year on year and 2.9 percent from the preceding quarter, according to the latest forecast released by the Ministry of Economy, Trade and Industry (METI).
Meanwhile, demand for finished steel, including domestic consumption and exports, is forecast at 18.49 million mt, unchanged year on year and up 1.8 percent quarter on quarter.
Domestic growth to offset weaker exports
Domestic finished steel demand is projected to increase by 1.2 percent year on year to 12.38 million mt, while exports are expected to decline by 2.4 percent to 6.11 million mt. METI stated that protectionist measures in overseas markets and China's continued high steel export volumes will maintain difficult conditions for Japanese exporters.
Demand for ordinary steel products is forecast to fall by 0.9 percent year on year to 14.54 million mt, while special steel demand is expected to rise by 3.4 percent to 3.94 million mt.
Construction demand improves despite labor shortages and higher costs
METI indicated that labor shortages and rising material costs continue to weigh on construction activity. In civil engineering, public works budgets remain at high levels, as in the previous fiscal year, although higher construction costs are expected to limit steel demand to broadly unchanged levels year on year.
Building activity also remains subdued, but signs of improvement in certain regions and segments are expected to support higher steel demand. Domestic ordinary steel consumption in construction is consequently forecast to rise by 2.3 percent year on year to 3.79 million mt, including a 3.6 percent increase in building-related consumption.
Automotive demand remains resilient as machinery gradually recovers
In manufacturing, METI expects automotive activity to remain resilient, keeping steel demand broadly stable year on year, while the continued gradual recovery in industrial machinery is expected to support a modest increase in consumption.
However, total ordinary steel consumption in manufacturing is projected to decline by 1.1 percent year on year to 5.68 million mt, with shipbuilding demand forecast to fall by 9.8 percent, compared with increases of 0.3 percent in automotive and one percent in industrial machinery.
