Japan's crude steel output is forecast to rise 1.7% year on year to 21.98 million tonnes in the first quarter of 2024 amid healthy demand from automobile manufactures, the Ministry of Economy, Trade and Industry (METI) said on December 26.

That would bring the aggregate to 88.10 million tonnes for the fiscal year to March 31, marking a 0.3% year-on-year rise.

Steel production is expected to increase with robust demand from automakers offsetting sluggish demand from other manufacturers and the construction industry, according to Daisuke Matsuno, director of the METI's metal industries division.

But there were concerns that weaker European economy and stalled economic recovery in China could weigh on steel demand in the industrial machinery sector, Daisuke Matsuno added.

The ministry estimated crude steel output to be 1.7% lower from the current quarter (October-December 2023).

Demand for steel products including exports is forecast to drop 0.5% in the first quarter of 2024 to 19.92 million tonnes, while exports are projected to increase 1.4%, the ministry said.

Exports of specialty steel products are likely to pick up, but those of ordinary steel products are projected to fall as China's supply-demand balance is deteriorating with strong exports from the country, Matsuno said.

Japan's imports of ordinary steel products increased by 20.8% in October 2023, marking a growth for 11 months running and notching the highest since around March 2014, showed data from the Japan Iron and Steel Federation.

(Writing by yan.sun  Editing by Emma Yang)
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