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Crude steel production plans by the country's steel companies put their combined output for the October-December period at 28.48 million tonnes as producers continue to raise production levels to meet construction-related demand.

The prediction was based on discussions between the Ministry of Economy, Trade & Industry (Meti) and Japan’s steelmakers.

The new figure is significantly higher than the ministry’s own internal forecast it put out at the beginning of last month projecting crude steel volumes to hit 27.97 million tonnes in the current quarter.

The new figure puts production at its highest level since the second quarter of 2008. It also means that production in the fiscal year ending March 31 2014 is likely to hit a six-year high.

Separate figures put out by Meti show that it expects crude steel production in October to have eased back by 0.3% from September levels.

However, not only is that an improvement on the 2.2% drop it had forecast a month earlier, but it also expects output in November to surge by 4.2% month-on-month – the biggest monthly jump since October 2012.

Crude steel production in September totalled 9.28 million tonnes, according to the most recent data issued by the Japan Iron & Steel Federation.

Behind the rise in output is continued strong demand from the construction sector on rising infrastructure and reconstruction spending.

Japan's October-December output of small bars is projected at 2.47 million tonnes, or 823,000 tpm. That compares with the 820,000 tonnes produced in September, itself almost 10% higher than year-ago levels.

However, with many construction projects already facing delays due to a shortage of skilled workers, industry officials are warning producers not to become overly speculative and to ensure that they keep production in line with “actual” demand.