According to the Japanese Ministry of Trade (METI), Japanese demand for crude steel in the first quarter of 2026 is expected to total 20.05 million mt, down 0.8 percent from the previous quarter and decreasing by 1.7 percent compared to the same quarter of the 2025.
METI’s latest report forecasts Japan’s steel demand, including exports, for the January-March period of 2026 at 18.27 million mt. This figure represents a 1.6 percent decline year on year, while remaining broadly unchanged compared to the previous quarterly forecast, with a marginal 0.1 percent upward revision.
Meanwhile, of the total demand in the first quarter, 14.54 million mt is expected to be for ordinary steel, decreasing by 1.5 percent year on year and by 1.2 percent compared to the previous quarter, while 3.73 million mt of demand is expected to be for special steel, down 1.8 percent year on year and increasing by 5.4 percent from the previous quarter.
Construction sector remains under pressure
According to the report, steel demand in the civil engineering segment is expected to decline slightly year on year, despite public works budgets remaining at levels similar to last year. The decline is attributed to higher material and labor costs. In the broader construction sector, demand is also forecast to decrease year on year, due to project delays linked to cost pressures, ongoing labor shortages, and a weakening sentiment toward homeownership.
The report also stated that the automotive sector remains lackluster, with steel demand expected to fall compared to the same period of 2025. Meanwhile, the industrial machinery segment is projected to maintain its current trend, recording a slight year-on-year increase.
Exports to drop by 0.5 percent
Japan’s steel exports in the first quarter of 2026 are expected to amount to 6.26 million mt, decreasing by 0.5 percent compared to the first quarter of 2025 and up by two percent quarter on quarter.
The industry report highlighted that the market share of Japanese automakers, particularly in China and Southeast Asia, continues to decline, contributing to a subdued overall demand environment. At the same time, the impact of trade measures targeting Japan remains in place. The report also emphasized the need for continued monitoring of China’s deteriorating steel supply-demand balance and potential spillover effects on regional markets, as well as ongoing developments related to US tariff policy.