Japanese exports slide in October while imports soar

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“The outlook for exports is not good. Demand is poor and will probably remain so for the coming months,” one industry official told Steel First.

With demand at home shrinking rapidly, the drop off in exports levels is simply adding to an increasingly problematic picture for the country’s steelmakers.

“There is very little growth anywhere,” the official said.

Total exports in October stood at 3.32 million tonnes, down 5.9% on the month and down 1.1% year-on-year, according to the latest figures released by the country’s finance ministry.

Moreover, the fall in steel prices and the strength of the Japanese currency meant that in value terms exports were down by 9.7% on year-earlier levels.

Export volumes to Japan’s core markets of Korea and China have fallen in recent months as mills in these countries continue to ramp up capacity.

This has forced Japanese producers to look to other markets that offer both healthy demand and lack of internal capacity, such as Thailand.

Indeed, the ASEAN bloc has now become Japan’s largest export market, accounting for over 32% of total shipments in October. Volumes were up by 3.5% year-on-year and flat with the previous month at 1.07 million tonnes.

Another area showing strong growth in demand is the Middle East. Volumes totalled 153,000 tonnes in October, still a relatively small figure, but up 37% on the year.

By contrast, exports to the NIEs, which includes traditionally Japan’s largest customer South Korea, slipped to 960,000 tonnes in October, down 12% on the month and 12.6% on the year.

Similarly, exports to China also saw sharp declines, sliding 8.2% year-on-year and 2.4% from September to 480,000 tonnes.

The spat between China and Japan is becoming increasingly worrying, with the Japan Iron & Steel Federation warning that it is now beginning to significantly affect steel demand as Chinese consumers boycott Japanese goods such as cars.

Overall shipments to Asia retreated 5% on the year and 4.3% on the month to 2.64 million tonnes.

To compound the woes facing Japanese mills, there has been a sharp increase in imports. Although total import volumes fell by 7.4% on the year, they spiked 21% on the month to 734,794 tonnes, driven by a 26.6% jump in imports from Asia.

For Japan’s steel producers, rising imports is a serious problem as it limits their ability to push through much-needed price hikes. Tokyo Steel, Japan’s largest EAF operator, for example, continually cited the rise in cheap imports as a major reason for not being able to increase its prices.

The company has been forced to hold pat on its selling prices for three months now.