Japan's crude steel output will mark its biggest quarter-to-quarter jump on record in the July-September quarter, helped by public spending and a rundown in stocks, but the longer term outlook is still cloudy, the government said.

The Ministry of Economy and International Trade said yesterday the country's crude steel output in July-September is to rise 14.3 per cent from the preceding three months to 21.77 million tonnes.

That would be down 28.5 per cent from a year earlier, however. "We assume car production will jump nearly 20 per cent in the next quarter from the current quarter, while public spending will prop up demand from the construction and engineering industry," METI director Masaki Ishikawa said. He also said demand for exports could rise 20 per cent thanks to progress in inventory adjustments at steel users in China, Thailand and other Asian countries.

But he said strong growth in output may not be repeated in October-December because stock adjustments will likely be completed by the end of the next quarter.

"It is still very difficult to foresee the trend in real demand after October," he said. METI forecast July-September demand for steel from Japanese industry at 17.57 million tonnes, up 10.2 per cent from April-June but down 20.4 per cent from a year earlier.

Japanese crude steel output will probably decline at a slower pace next quarter, as customers including carmakers cut inventories, the trade ministry said. Mills in Japan are easing output cuts as carmakers and electronics companies reduce stockpiles.

Source: Emirates Business

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