Japan February crude steel output drops 0.5 percent year-on-year

Japan’s crude steel output in February dropped 0.5 percent from a year earlier to 8.3 million tonnes, snapping three straight months of gains, but this could be short-lived as local demand remains solid, the Japan Iron and Steel Federation said on Thursday.

The crude steel output, which is not seasonally adjusted, decreased 8.1 percent from January.

“The year-on-year decline is small and is a temporary phenomenon,” said a researcher at the Federation.

“We think steel production is still on the recovery after suffering from glitches at some steel plants last year,” he said, adding domestic steel demand from automakers and construction customers remains strong.

Japanese steelmakers are enjoying the best market conditions in at least three years. Steel prices have risen on increased production by automakers, while construction is in full swing for Tokyo’s 2020 Olympics and a series of redevelopment projects in the Tokyo metropolitan area.

Nippon Steel & Sumitomo Metal Corp and JFE Holdings Inc are making hefty investments in ageing domestic plants as problems at their plants have prevented them from producing as much steel as they would have liked.

Source: REUTERS