Japan Steel Output May Decline on Waning Demand for Ships, Cars

Japan’s steel output will probably fall 4.1 percent this quarter, the biggest decline in five quarters, as domestic mills await the results of efforts to stimulate the economy.

Crude steel output in Japan will probably fall to 26.38 million metric tons in the quarter that started April 1 from 27.5 million tons in the same period a year earlier, the Ministry of Economy, Trade and Industry said today in a statement. Production is set to fall 0.9 percent from the estimate for the previous quarter, the ministry said.

Japan’s rebuilding of areas wrecked by the earthquake and tsunami in March 2011 and higher exports spurred by the weakening of the yen are failing to overcome a drop in domestic demand from shipbuilders, carmakers and other manufacturers. The country’s crude steel output was little changed at about 107.3 million metric tons in the fiscal year ended March 31, the statement said.

Domestic consumption of ordinary steel from shipbuilding customers is set to fall 24.2 percent this quarter due to global overcapacity, the biggest drop among manufacturers. Carmakers are forecast to cut their use of steel by 9.5 percent from a year earlier. Consumption of ordinary steel used in construction is likely to increase 5.8 percent to 4.92 million tons in the current quarter.