April 21, 2017 5:15 am JST

Japan's crude steel output rebounds as domestic demand grows

Major steelmakers near full production, though clouds loom overseas

Japan's big steelmakers are churning out crude steel at nearly full production.

TOKYO -- Japan's cooling steel industry is showing signs of reigniting as big producers seize domestic demand for construction and automobiles, though unpredictable conditions overseas remain a concern.

Crude steel output for fiscal 2016 rose 0.9% to 105.16 million tons, the first gain in three years, data released Thursday by the Japan Iron and Steel Federation shows. Output for March grew 1.8% on the year.

Nippon Steel & Sumitomo Metal, JFE Steel and other manufacturers are nearly at full production. The 2020 Tokyo Olympics are expected to spark a surge in construction orders, and Japanese automobile production is also strong.

"There should be mild recovery in fiscal 2017 as well," said Yasumitsu Saeki, an executive vice president at Nippon Steel.

Steelmakers aim to capture increasing demand for lighter cars. Nippon Steel plans to boost capacity 20% for lightweight sheet used in automobiles at its Yawata works in Fukuoka Prefecture. Kobe Steel has started producing a similar type of steel.

JFE Steel has developed pipe thicker than that of Japanese peers, for use in the pillars of buildings. Builders can use fewer pillars and augment the amount of usable space, broadening layout possibilities, the JFE Holdings unit says.

Yet conditions in China, the U.S. and elsewhere could impact Japan's steel production. China, despite declaring it would cut excess capacity, produced a record 72 million tons of crude steel in March, up 1.8% on the year.

U.S. President Donald Trump favors American-made products. Should China, which makes more steel products than any other nation, decrease its U.S.-bound exports, then leftover steel could end up circulating in Japan and elsewhere in Asia, dampening market conditions.

"Future trends are getting harder to predict," said an official at a Japanese blast-furnace steelmaker.

(Nikkei)

Nippon Steel & Sumitomo Metal Corp.

Japan

Market(Ticker): TKS(5401)
Sector:
Industry:
Non-Energy Minerals
Steel
Market cap(USD): 23,274.16M
Shares: 950.32M

JFE Holdings, Inc.

Japan

Market(Ticker): TKS(5411)
Sector:
Industry:
Non-Energy Minerals
Steel
Market cap(USD): 12,604.58M
Shares: 614.43M

Kobe Steel, Ltd.

Japan

Market(Ticker): TKS(5406)
Sector:
Industry:
Non-Energy Minerals
Steel
Market cap(USD): 4,469.32M
Shares: 364.36M

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