Japan July crude steel output almost flat

Fri Aug 19, 2011

* Output falls 0.8 pct from June on daily basis
* Output drops 1.2 pct yr/yr for fifth-consecutive fall
* Higher auto output offers some hope, but yen clouds export outlook

TOKYO, Aug 19 (Reuters) - Japan's crude steel output was almost flat in July from the previous month, as the strong yen hurt steel exports while carmakers ramped up production following a post-quake slump.

Crude steel output totaled 9.11 million tonnes in July, down 0.8 percent on a daily production basis from June after adjustment for the number of days in the month, the Japan Iron and Steel Federation said on Friday.

From a year earlier, output fell 1.2 percent for a fifth consecutive year-on-year fall. That was an improvement, however, from a 5 percent drop in June, a 7 percent slide in May and a 6 percent drop in April, after the devastating earthquake on March 11.

"We expect steel demand to further increase in the coming months thanks to higher output at carmakers, but the strong yen is worrying," an industry official said.

Exports of Japanese steel products plunged 9.3 percent from a year earlier to 3.5 million tonnes in June as the yen hovered near a record high against the U.S. dollar. That was a fourth consecutive year-on-year decline.

Japan's five blast furnace steelmakers, including the world's No.4 steelmaker, Nippon Steel Corp , and fifth-ranked JFE Steel Corp , plan to produce 21.35 million tonnes in the July-September third quarter, 7 percent more than in the second quarter, as they target growing demand from carmakers.

Second-quarter output of 19.89 million tonnes was the lowest in two years due to the impact of the earthquake, which damaged Sumitomo Metal Industries Ltd's plant on the northeast coast.