Japan's April crude steel output falls 4.4% in fourth monthly drop

FILE PHOTO: A production line of Nippon Steel & Sumitomo Metal Corp.'s Kimitsu steel plant is pictured in Kimitsu, Chiba Prefecture, Japan, May 31, 2018. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - Japan’s crude steel output fell 4.4% in April from a year earlier, the Japan Iron and Steel Federation said on Monday, as producers responded to slow demand from the auto sector due to a prolonged supply-chain crunch and China’s COVID-19 restrictions.

Output in Japan, the world’s third-largest steel producer, came in at 7.47 million tonnes for April, a fourth consecutive monthly decline and down 6.1% from March. The figure was not seasonally adjusted.

“The supply-chain issue continued to slow automobile production, weighing on steel demand,” said a researcher at the federation, adding that output was also affected by the shutdown of a blast furnace for repair.

Nippon Steel Corp, Japan’s biggest steelmaker, shut down one of its blast furnaces in Nagoya for relining in late January, expecting operations to resume in June.

Earlier this month, Toyota Motor, the world’s top automaker by sales, cut its global production target for May by around 50,000 vehicles to about 700,000, as it planned to suspend some operations for up to six days due to China’s lockdowns.

The plan followed several cuts in its production plan between April and June.

Japan’s crude steel output increased for 10 months in a row last year after a 12-month-long slide to February 2021, as demand picked up from a pandemic-induced slump. But the figure has been declining since January this year.

The 4.4% slip in May comes in line with a 4.2% fall predicted by the Ministry of Economy, Trade and Industry (METI) for the April-June quarter.

Reporting by Yuka Obayashi; Editing by Jan Harvey