Raw steel production in Japan to drop significantly in 2020

Steel production in Japan is expected to be about 35 million tons between April and September and less than 80 million tons in the current fiscal year until the end of March, said the new head of the steel industry group.

“This is my personal opinion, but I still expect Japan's crude steel production to fall below 80 million tonnes in the current fiscal year,” new chairman of the Japan Federation of Iron and Steel, Eiji Hashimoto, told a press conference.

In May, he gave the same forecast as the president of Nippon Steel Corp, the world's third largest steelmaker.

Steel production in Japan for the year to March 2020 amounted to 98.43 million tons, which is 4.3% less than a year earlier.

When asked if he expects another round of consolidation in the local steel industry to counter the sharp decline in demand amid the coronavirus pandemic, Hashimoto said the merger is not a solution to survival.

“Every steelworker must first do his best on his own to improve management through measures such as reducing excess capacity,” he said.

Hashimoto, who became chairman of the federation on Tuesday, also warned that the relative dominance of Chinese steel mills will increase in the wake of the pandemic as they increase productivity and improve technology.

“Our biggest threat is China,” he said.

Chinese steel mills are ramping up production as demand in the world's second-largest economy recovers after movement and activity restrictions imposed to counter the epidemic were lifted, while Japanese steelmakers were forced to cut production to reflect weak demand.