Japan metals manufacturers see pick-up in demand from automakers after Q1 plunge
17/08/2020 08:40
By Yuka Obayashi
TOKYO, Aug 17 (Reuters) - Japanese manufacturers of metals,
including steel and aluminium, saw their output plunge in the
April-June quarter as automakers temporarily shut factories to
curb the spread of the COVID-19 virus and to match slumping
demand.
They expect a gradual pick-up in metals used in automobiles
and other industries toward next March, but not enough to bring
demand back to pre-pandemic levels, suggesting a smaller annual
import of raw materials such as iron ore, coking coal and
primary aluminium ingots.
"Demand for steel used in automobiles will recover from the
July-September quarter as automakers are stepping up output, but
it won't be back to 100% by March," Junichi Akagi, general
manager of JFE Steel, Japan's second-biggest steelmaker, said
earlier this month.
Crude steel output at the world's No.3 steel producer
plunged 31% in the April-June quarter versus a year earlier to
18 million tonnes, according to the Japan Iron and Steed
Federation, with orders of ordinal steel from automakers
slumping 58% to 920,000 tonnes, the lowest quarterly level since
1971.
The nation's production of aluminium rolled products slid
15% in the quarter, the Japan Aluminium Association said.
With the auto segment accounting for about 20% of
steelmakers' local demand, and 15-18% for suppliers of rolled
aluminium products, a recovery in car production is a key for
the suppliers' recuperation from devastated earnings.
urn:newsml:reuters.com:*:nL4N2F627Q urn:newsml:reuters.com:*:nL4N2FE2O5
"Our steel output in the October-March second half will rise
20% from the April-September half as industry activities,
centred in automobiles, are expected to rebound," JFE Holdings
5411.T President Koji Kakigi said last week.
JFE Steel may restart one of the two blast furnaces which
were temporarily suspended to cope with the COVID-19 crisis, in
October, Kakigi said.
Nippon Steel 5401.T President Eiji Hashimoto, also the
head of the steel federation, has warned Japan's crude steel
output may fall below 80 million tonnes this financial year, the
lowest since 1968. urn:newsml:reuters.com:*:nL4N2DT2DM
UACJ Corp 5741.T , Japan's biggest aluminium roller, also
forecast a recovery in demand from automakers after June, but
cited "uncertainty" over the outlook.
Faced with collapsing demand for finished metals, Japan's
import of raw materials dropped sharply in the April-June
quarter, with iron ore dipping 21% year-on-year, coking coal
sliding 8% and primary aluminium ingots declining 16%, according
to trade data.
If a recent resurgence in Japanese coronavirus infections
prompts restrictions in industry activities, a further reduction
in imports of these materials is likely, industry experts say.
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Japan crude steel output Japan crude steel output https://tmsnrt.rs/3kNQxKO
[ Japan output of rolled aluminium products ] [ Japan output of
rolled aluminium products ] https://tmsnrt.rs/2EaZRYa
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(Reporting by Yuka Obayashi; Editing by Lincoln Feast.)
((Yuka.Obayashi@thomsonreuters.com; +813-4563-2761;))