Japan April-June crude steel output forecast to fall 4.9% on-year, METI says

By Yuka Obayashi

TOKYO, April 10 (Reuters) - Japan's crude steel output, not yet factoring in the impact of U.S. tariffs, is expected to fall to its lowest level in about five years in April-June due to weak demand from construction and manufacturing, the industry ministry said on Thursday.

The forecast of 4.9% year-on-year fall to 20.2 million metric tons marks a sixth straight quarterly decline and a 2.1% drop from the previous quarter.

For the world's third-largest steel producer, 20.2 million tons would be the lowest quarterly output since July-September 2020, when the COVID-19 pandemic eroded demand.

Steel product demand, including exports, is seen falling 4.0% to 18.04 million tons, the Ministry of Economy, Trade and Industry (METI) said, citing an industry survey.

Exports are forecast to fall 6.5%.

"In construction, demand is expected to decline due to project delays from rising material costs and labour shortages," Manabu Nabeshima, director of METI's metal industries division, told a news conference.

"In manufacturing, auto demand remains weak and industrial machinery, especially for construction, is sluggish," he added.

He also cited declining market share of Japanese automakers in China and economic slowdowns in Southeast Asia and Europe as factors weighing on exports.

The cloudy forecast does not fully reflect the impact of new U.S. tariffs, he said, suggesting a deeper fall could be in the offing.

Last month, Japan Iron and Steel Federation Chairman Tadashi Imai warned the nation's annual crude steel output could fall below 80 million tons as U.S. tariffs on steel and automobiles could reduce annual steel output by several million tons.

Japan produced 84 million tons in 2024.

The government will consider taking action on Chinese steel imports if any unfair practices are found under World Trade Organization rules, while continuing to press the U.S. for exemption from steel and aluminum tariffs, Nabeshima said.