Posted on 26 Jan 2024
A sluggish domestic construction sector and tough export-market conditions contributed to Japanese crude steel output falling again during last calendar year, the Japan Iron & Steel Federation (JISF) reported on Tuesday when releasing data showing total production in 2023 dropping by 2.5% from 2022 to reach 86.996 million tonnes. The total was also below the 90 million tonnes for the second consecutive year and below 100 million tonnes the industry's long-held benchmark for the fifth consecutive year, Mysteel Global notes.
Interestingly, by steel production process the JISF statistics show that the ratio of crude steel produced by the LD converter route and by electric arc furnaces has changed relatively little over the past three years, despite the integrated mills idling and shutting upstream facilities. During last year, the ratio of converter steel in the total was 73.8%, which compares with 73.3% in 2022 and 74.7% in 2021.
The problem last year lay in the markets for the steelmakers' steel, the JISF explained, pointing out that while automobile production continued to recover due to the resolution of parts supply constraints including the semiconductor shortage, the domestic construction market was sluggish due to high material prices and labour shortages, and domestic demand for steel-intensive items such as industrial machinery was generally sluggish.
The construction sector, by far the largest domestic consumer of Japanese steel, continues to struggle, with the latest statistics from the Ministry of Land, Infrastructure, Transport and Tourism showing that during November, total construction starts across Japan fell by 11% on year to 8.51 million square metres and marking the lowest since November 2022. Within that total, starts on steel-frame structures were 20% lower at just 2.77 million sq m.
It's probably not surprising then that production of key construction steel items sank again last year, with the JISF numbers showing that production of H-beams falling by 6.3% on year to 3.4 million tonnes, and that of small bars (mostly rebars) by 4.3% to 7.36 million tonnes.
Meanwhile, shipping abroad also faced headwinds, with the JISF noting that China's exports surge led to a decline in overseas steel prices, "which also had an impact on the suppression of steel exports." However, though prices might have softened for Japanese mills last year (in tandem with the softening Japanese Yen), they evidently managed to lift their export volumes.
Though full calendar-year statistics are yet to be published, those from the JISF for January-November show that Japan's exports of ordinary carbon steel items were higher by 6.7% at 20.9 million tonnes compared with the first eleven months of 2022.
Japan's recent calendar year production of carbon steel items (selected)
Product | 2023 | 2022 | 2021 |
H-beams | 3,415,800 | 3,644,400 | 3,574,700 |
Small bars (incl rebars) | 7,357,300 | 7,687,700 | 7,793,900 |
Wire rods (ordinary) | 413,100 | 429,300 | 548,400 |
Heavy plates | 8,574,400 | 9,248,000 | 8,923,100 |
Hot rolled coils | 36,477,200 | 35,964,000 | 39,754,700 |
Cold rolled coils | 14,025,500 | 14,440,900 | 16,669,000 |
Galvanized sheets | 8,539,500 | 8,368,000 | 9,729,700 |
Welded/seamless tubes | 3,197,000 | 3,524,800 | 3,620,000 |
Unit: Tonnes
Source: JISF
Source:Mysteel Global
