Japan's crude steel output to keep falling in Oct-Dec period

Japan's crude steel output to keep falling in Oct-Dec period.

Japan's October-December crude steel production will likely drop 1.5% on the quarter to 26.98 million tons, according to a forecast released by the Ministry of Economy, Trade and Industry.
This second consecutive quarterly decline reflects a drop in domestic steel demand for automobiles, as well as lower exports amid the strong yen and a looser supply-demand balance in China. Japan's steel industry is "becoming structurally more vulnerable to the changes in foreign markets," says a METI official.

October-December steel demand will likely total 23.84 million tons, down 0.9% from the projected figure for the July-September quarter, with domestic demand slipping 0.9% to 15.42 million tons. Demand for automotive steel is projected to tumble 7.3%, mainly because government subsidies for purchasing environmentally friendly vehicles expire. And demand for construction steel will drop 2.6% as capital investments remain sluggish.

Exports of steel products, which have driven a recovery in Japan's steel industry, are seen declining 0.7% to 8.42 million tons. Japanese steelmakers are refraining from making export deals, concerned that trades would hurt profitability given the strong yen and China's softening steel market.