Japan’s Steelmakers Plan to Lift July-Sept. Output
Japanese steelmakers plan to increase crude steel production in July-September by 6.4% year on year and 4.2% from the previous quarter to 21.2 mt, marking the second consecutive quarterly increase, according to the latest survey by the Ministry of Economy, Trade and Industry (METI).
The production plan is also 5.0% higher than METI’s forecast released in mid-July, although production remains at a relatively low level.
Sources at steelmakers said the demand environment had not changed significantly, suggesting the higher production plan may be partly due to Nippon Steel’s efforts to catch up on production at the Muroran Area of North Nippon Works in Hokkaido.
One blast furnace at Muroran, with an inner volume of 3,014 cubic metres, was forced to halt operations on 1 December 2025 after a fire occurred at one of the hot-blast stoves attached to the furnace. The furnace restarted on 11 April, and Nippon Steel confirmed the facility had returned to normal operations by the end of May.
A sales official at a Tokyo-based steelmaker said there had been no significant change in domestic steel demand, with a gradual recovery in the manufacturing sector, while construction demand remained weak. However, the impact of a recent natural disaster on steel demand remains uncertain and could slow manufacturing activity.
A magnitude 7.1 earthquake struck Kumamoto prefecture in Kyushu, southwestern Japan, on 28 July. Steelmakers in the region were not believed to have suffered major damage to their facilities, but some manufacturers near the seismic centre halted operations, disrupting supply chains and forcing some companies, including automakers, to suspend production.
Japanese steel exports are facing challenges from expanding trade measures and declining Asian steel prices. Steelmakers expect crude steel production for export to fall 5.6% year on year but increase 6.8% from the previous quarter to 6.15 mt.
McCloskey assessed weekly HRC CFR Vietnam at $505/t on 7 August, down $30/t from a month earlier and falling $5/t from the previous week. East Asian HRC suppliers were heard targeting above $550/t CFR for Southeast Asia, making it difficult for Japanese mills to compete with suppliers from India and Indonesia.
A Tokyo-based flat steel trader expects Japanese crude steel production in the current quarter to be revised lower, citing the yen’s appreciation against the US dollar since the end of July following coordinated intervention by the Japanese and US governments.
“The stronger yen is disadvantageous for Japanese exporters, so actual export-oriented production in the quarter may be lower than mills’ plans,” he said.