Both production and domestic demand have decreased noticeably compared to 2024, while the share of imports in total consumption remains high. This suggests that local producers will continue to face competitive pressure.
In the first quarter of the year, crude steel production reached 95.1% compared to the same period last year, and in the second quarter, it was 94.8%. According to monthly data, the sharpest decline was recorded in February 2025 at 91.5%, indicating that the contraction in the sector has become persistent.
On the demand side, apparent consumption figures show a more pronounced decrease. In the first quarter of 2025, consumption is projected to fall by approximately 6.8% year-on-year, reaching 13.6 million tons. Especially in February, consumption decreased to 87.3% year-on-year, representing the strongest indicator of weakness in the domestic market.
Despite the decline in production, import ratios remain high. In the first half of 2025, the import share was around 12%, rising to 13.5% in July, highlighting the sector's continued reliance on external sources. Although import volumes also decreased year-on-year, this decline aligns with the overall contraction of the market.
In the coming period, limited recovery in global demand and volatility in energy costs may lead Japan's steel sector to maintain a cautious approach on the production side. Unless a sustained improvement in domestic demand is observed, producers are expected to focus on export markets and increase price competition. It is projected that in the second half of 2025, the sector will continue to maintain low production levels while concentrating on the stabilization process.
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