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Japanese crude steel output fell by 6.7pct YoY in Oct - JISF
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Tuesday, 20 Nov 2012

Reuters reported that Japan's crude steel output registered its biggest annual fall in nine months in October 2012, as a decline in domestic car production and an increase in imports of construction steel reduced demand.

Japan Iron and Steel Federation said that output fell by 6.7% YoY to 8.84 million tonnes. That was the biggest fall since January 2012, when the yen's surge to near record highs and devastating floods in Thailand forced Japan's top two steelmakers, Nippon Steel and Sumitomo Metal Corporation and JFE Steel Corporation, to cut exports. October 2012 output, which is not seasonally adjusted, increased by 0.4% MoM from September 2012.

An official at JISF said that "A fall in car output has affected crude steel output."

Japan's steel producers are hurting from a decline in demand from domestic carmakers after the government ended incentives in September for environmentally friendly cars.

Compounding the sector's troubles, political tension between Japan and China that erupted in September after a row over disputed islands triggered violent anti Japanese protests across China, has hurt sales of Japanese cars in China.

Demand for Honda, Toyota and Nissan cars slumped in China in September as tempers flared, with South Korea's Hyundai Motor and Germany's BMW picking up market share. Toyota has said its China sales dropped 49% in September 2012.

The industry official said that the yen's strength also prompted larger imports of cheaper construction steel from Asian rivals such as South Korea's POSCO and Baosteel of China, pressuring prices and forcing Japanese makers to cut output.

Source - Reuters


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