territorial spat with China is expected to cost Japanese
steelmakers around 550,000 tonnes in lost production in the
current quarter, according to Japans Ministry of Economy,
Trade and Industry.
Quarterly steel output is on
track to fall below the 23-million-tonne mark vs. the
ministrys previous estimate of about 23.5 million tonnes
due to a widespread boycott of Japanese goods by Chinese
October crude steel production
of 8.84 million tonnes was down 6.7 percent from the same month
last year, the biggest year-on-year fall in nine months, due
largely to a decline in domestic auto production and an
increase in imports of construction steel, according to the
Japan Iron and Steel Federation.
Japanese automakers were badly
hit by the boycott, and they were forced to cut production as
their sales in China slumped. The auto sector is the biggest
steel-consuming market for Japans integrated
Domestic production of passenger
vehicles by Japans eight leading automakers declined 12.4
percent in October compared with a year earlier, with
production at Toyota Motor Corp. down 16.3 percent, Nissan
Motor Co. down 13 percent and Suzuki Motor Corp. dropping 16.8
percent. Meanwhile, auto output in China sank 48.9 percent,
with Toyota registering a 61.1-percent drop, Nissan logging a
44-percent decrease and Honda Motor Co. suffering a
Making matters worse,
Japans domestic sales of new autos, trucks and buses
declined 3.3 percent in November compared with the same month
last year, the third consecutive monthly fall after the
governments buying incentives ended in mid-September.
Tensions continue to simmer
between Japan and China over territorial rights to the Senkaku
Islands in the East China Sea, but automakers believe that the
worst effects of the boycott appear to be over, although they
still expect to see a year-on-year decline in sales.
Steelmakers said they expect
demand from China to improve in the first quarter of 2013, and
they also expect the recent weakness in the Japanese currency
and the strengthening of the South Korean won to help improve
the profitability of exports and raise the cost of imports.
A Ministry of Economy, Trade and Industry official told
AMM sister publication Steel First much the
same. "I think there will still be some impact (from the
boycott) in the next quarter. However, the volume is not yet
clear," he said.
A version of this article was first
published by AMM sister publication Steel