Japan’s Crude Steel Output to Decline by 2.4% in Q1 2025
Japan’s crude steel output is projected to decrease by 2.4% year-on-year in the first quarter of 2025, largely due to sluggish demand from the manufacturing and construction industries, according to the Ministry of Economy, Trade and Industry (METI). The decline will contribute to an expected 3.6% fall in Japan’s total steel production for the fiscal year ending March 31, 2025, bringing the annual output to 83.72 million metric tons. This marks the lowest level since fiscal 2020 when the COVID-19 pandemic severely impacted global demand.
In its forecast released on Thursday, METI estimated that crude steel production in the January-March period would total 20.93 million metric tons, a decrease from 21.45 million metric tons in the same period last year. The forecast also suggests a slight 0.1% drop compared to the current quarter, highlighting ongoing challenges in the steel sector. A key factor behind the weak steel demand is the slowdown in key sectors such as manufacturing, particularly the automotive industry, and construction. Manabu Nabeshima, director of METI’s metal industries division, stated that steel demand is expected to remain subdued due to weak consumption from these vital sectors.
Looking ahead, the ministry has also predicted a 0.5% fall in demand for steel products, including exports, in the first quarter of 2025. Exports, in particular, are expected to decline by 0.4%, which could further strain Japan’s steel industry. The Japan Iron and Steel Federation has expressed cautious optimism, forecasting a slight increase in the country’s crude steel output for fiscal 2025. However, the federation’s chairman, Tadashi Imai, urged the government to take swift action against rising steel imports from China, which have been putting pressure on Japan’s domestic steel supply chains.
The growth of China’s steel exports, which have surged to near-decade high levels, has been a point of concern for Japanese steelmakers. Industry analysts predict that China will continue to ramp up steel exports in 2025 as a way to manage overcapacity and offset soft domestic demand. This is expected to exacerbate trade tensions, with Japan urging the government to take prompt trade measures in response. Despite the challenges, Japan remains focused on ensuring its steel sector’s long-term stability and compliance with international trade rules, including those set by the World Trade Organization (WTO), as confirmed by METI officials.
