In an encouraging development, Japan's crude steel output is anticipated to rise by 2.2% in the July-September quarter compared to the previous year. This projected growth is bolstered by a gradual recovery in automobile production and higher exports, as reported by the Ministry of Economy, Trade and Industry. If realized, this would mark the first increase in seven quarters. METI estimates crude steel output in the world's third-largest steel producer to reach 22.31 million metric tons for the July to September period, surpassing the 21.82 million metric tons recorded a year earlier.
However, METI also anticipates a 0.5% decline in steel production compared to the previous quarter, attributing it to a seasonal reduction in electric arc furnaces. Despite this, the demand for steel products, including exports, is predicted to rise by 0.9% to 20.37 million metric tons in July-September compared to the same period last year, as per an industry survey cited by the ministry.
The report also forecasts a remarkable 10.0% growth in exports, indicating a recovery from the slump witnessed a year ago due to lackluster overseas market conditions.
The recent growth in global sales reported by Japanese automaker Toyota Motor further supports this positive trend. Toyota experienced a significant 10% surge in sales in May compared to the previous year, benefiting from improved chip and parts supplies and witnessing growth in both domestic and key international markets.
Despite these positive indicators, Mr. Daisuke Matsuno, the director of METI's metal industries division, sounded a note of caution during a press conference. He highlighted potential downside risks to steel demand from the auto industry, particularly due to concerns surrounding the shortage of auto parts, including semiconductors. Matsuno also pointed to the uncertain outlook for exports, emphasizing the economic slowdown in China, the largest consumer of steel globally.
Source: Steelguru
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