On March 23, the Japan Iron and Steel Federation (JISF) has announced that Japanese crude steel output is expected to see a year-on-year fall of two percent or 2 million mt, decreasing to 104 million mt in the Japanese fiscal year 2012-13 (beginning on April 1), if the country's exports stay at their current level.
Eiji Hayashida, chairman of the JISF, said steel demand from the shipbuilding sector was expected to plunge 20 percent, or 1 million mt in the financial year 2012-13. This will offset additional demand of an estimated 600,000 mt from reconstruction to build ports and roads devastated by the earthquake which hit Japan on March 11 last year.
Japan's crude steel production has been on a downtrend since late last year as its strong currency cut into exports while widespread floods in Thailand ruptured the supply chains of Japanese manufacturers, reducing steel demand. However, a recovery in exports after a rebound in Asia's steel demand would help raise Japan's crude steel output to match this year's level of 106 million mt.
The JISF also announced that domestic steel demand has continued to be volatile, while signs of recovery can be seen in overseas supply and demand in the first month of the current year. However, the Japanese steel industry is increasingly inclined to import because of the appreciation of the yen and the strong increases in electricity supply charges seen in the country. "Japanese manufacturers will not return to normal operations unless the yen falls below the 90 level," Hayashida, also the president of JFE Steel Corp, the world's fifth-biggest steelmaker, said.