Japan's FY23/24 crude steel output may stay below T90 mln -industry group head

JFE Holdings

26/09/2023 12:13

By Yuka Obayashi
       TOKYO, Sept 26 (Reuters) - Crude steel output in Japan,
the world's No.3 steel producer, is expected to stay below 90
million metric tons in the fiscal year to next March due to weak
local demand from the construction and other sectors, the head
of a steel industry group said on Tuesday.
    "There is a sign of recovery in domestic steel demand for
automobiles thanks to an improvement in chip supply, but demand
for the rest of the industry remains sluggish," Japan Iron and
Steel Federation Chairman Yoshihisa Kitano told a news
conference.
    "Demand in construction is lagging as a shortage of labour
and soaring materials prices have caused a delay in large
projects," said Kitano, who is also president of JFE Steel.
    The latest forecast was down from his May prediction of
90-95 million tons and compares with 87.85 million tons in the
2022/23 fiscal year that ended on March 31.
    The export market is also "very weak", he said, noting that
China's steel production and exports remain high despite its
stalling economy.
    "We are not optimistic about a rapid improvement," Kitano
said.
    Earlier this month, Japan's industry ministry unveiled a
plan to more than double its financial support to the steel
industry to accelerate the development of manufacturing "green
steel", or cutting emissions of carbon dioxide (CO2) from the
steel-making process, by using hydrogen.  
    The government now plans to provide nearly 450 billion yen 
($3 billion), up from 190 billion yen, to help speed up the
development of low-emission steel-making processes, using
hydrogen.
    Hydrogen has been touted as a low-carbon solution to
steelmaking methods, replacing the more polluting coal, but
there are still many technological challenges.  
    "We appreciate the action as the 190 billion yen aid was not
considered equal to the government's support in other
countries," said Kitano, but he also warned that it still may
not be enough.
       
($1 = 148.8700 yen)

 (Reporting by Yuka Obayashi; Editing by Susan Fenton)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))