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UPDATE 2-Japan crude steel output dives record 44 pct
March 18, 2009 / 5:37 AM / 9 years ago

UPDATE 2-Japan crude steel output dives record 44 pct

* Japan Feb crude steel output falls record 44 pct vs yr ago

* Logs fifth straight month of decline amid auto slump

* Monthly output 5.48 mln tonnes, lowest since June 1968

By Sachi Izumi

TOKYO, March 18 (Reuters) - Japanese crude steel output in February fell a record 44 percent from a year earlier to its lowest since 1968 as a global slump hits key customers in the auto sector, and no upturn is seen soon.

The Japan Iron and Steel Federation said on Wednesday output tumbled to 5.48 million tonnes last month, marking the fifth straight month of decline as Japan slides deeper into recession.

For historical crude output data, click:

here

Steelmakers, including Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T), have slashed production as sliding sales and rising inventories force Toyota Motor Corp (7203.T) and other automakers to cut output.

Nippon Steel, the world’s No. 2 steelmaker, plans to slash output in January-March by 40 percent.

It expects to restart some blast furnaces later this year, as it believes that automakers are likely to increase output by around July at the latest after inventories slowly clear.

Mizuho Securities analyst Hiroshi Matsuda agreed the April-June quarter would be similarly bleak to the current one, but he warned any recovery from July would also be slow.

“Auto-use makes up a large part of Japan-made steel, and auto production is not going to show a big jump all of sudden,” he said.

“Both inventory adjustment and a demand slump are causing this big of output fall now. Since inventory adjustment will eventually end, we should be able to see production recovering just that much.”

Japan’s crude steel output in the 11 months to February fell 9.9 percent to 99.8 million tonnes, the industry body said. The business year starts in April for many Japanese companies. (Editing by Edwina Gibbs)

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