Japanese crude steel production fell 0.2% year-on-year to 8.43 million tonnes, according to the Japan Iron and Steel Federation (JISF). The shallow decline marks the continued drift in Japanese production in the wake of weak domestic consumption and struggling exports, Kallanish notes.

Nippon Steel and Sumitomo Metal Corporation (NSSMC) became the latest steelmaker to admit a decline in output was likely this year. It says that it expected national output to drop below 110mt in 2015, down from 111mt in 2014.

Over January-February Japan produced 17.46mt of crude steel, equivalent to an annualized 108mt and down -2.2% from the same period of 2014. The lower cost of iron ore relative to scrap appeared to be having some effect, with pig iron production down just -0.4% over the same period to 13.4mt, or an annualised 83mt.

Japanese steel demand has been impacted by a slowdown in the economy in general, and a fall in consumption following tax hikes from 1 April 2014 in particular.

Japanese steel exports have been tepid despite an uptick in January. In 2014, exports were down 3.1% y-o-y at 42.09mt, JISF says. With the domestic market limited, Japanese growth would have to come from its exports, mainly to Japanese-owned processors and end-users in Southeast Asia, Kallanish notes.