Japan steel industry market report 2020

Japan's crude steel output in 2020 was 83.19 million tons, down 16.2% year-on-year, and lower than the 87.53 million tons in 2009 (after the 2008 financial crisis), which was the lowest level since 1969. By furnace type, the output of converter steel was 62.05 million tons (a decrease of 17.3% year-on-year), the output of electric furnace steel was 21.15 million tons (a decrease of 13.0% year-on-year), and the output of electric furnace steel accounted for 25.4% (an increase of 0.9% year-on-year). Divided by steel type, the output of ordinary carbon steel was 65.76 million tons (a decrease of 13.0% year-on-year), and the output of special steel was 17.44 million tons (a decrease of 26.4% year-on-year). Since most of the raw materials for steel production in Japan are scrap steel, there is a greater demand for Metallurgical Silicon Carbide and Silicon Briquette products.



Currently, Japanese steel companies are composed of Nippon Steel, JFE Steel and Kobe Steel. Although all companies are reducing fixed costs by adjusting the structure of production facilities, the decline in steel demand caused by the new crown pneumonia epidemic has brought severe challenges to companies. Nippon Steel shut down all production equipment at Kure Steel Works, and JFE Steel Corporation decided to suspend the upstream process of East Japan Steel Works (Keihin area). Combined with other measures, crude steel production capacity will be reduced by approximately 9 million tons. Due to the unpredictable demand for domestic steel products in Japan, companies are taking measures to further tighten production capacity. On the other hand, global steel demand is expected to grow in the long-term, and companies are looking for ways to increase overseas demand. In 2020, the joint ventures of Japanese steel companies in the Chinese market have achieved good results due to the strong demand throughout the year, as are the joint ventures in the Indian market.

In terms of technology, two keywords have become the focus: advanced information technology and CO2 reduction. Advanced information technology has now shifted from development to implementation, and the application of blast furnaces has achieved results and progress. In terms of CO2 emission reduction, research on hydrogen reduction ironmaking has begun, and “zero-carbon steel” technology with zero CO2 emissions is being vigorously developed, and efforts are being made towards the goal of practical use, of which carbon capture, utilization and storage (CCUS) technology is the key .

Starting from the 2020 fiscal year (April 2020), Japanese crude steel production has fallen rapidly due to a sharp decline in demand. However, this trend bottomed out in June. Due to the strong recovery of steel demand for automobile manufacturing and the support of strong domestic demand in China, Japanese crude steel production turned to increase production, and this led to ferrosilicon, silicon briquette, silicon carbide and other raw materials. The price increase. In the 2020 market pattern of "expensive raw materials/cheap products", there has been a wave of price increases since the middle of the year, and demand has recovered faster than expected in the second half of the year, and steel is in short supply. Although there are uncertainties such as the new crown pneumonia epidemic may spread again in 2021, it is expected that both domestic and external demand for steel in Japan will rebound from the collapse in 2020, showing an overall trend of recovery.