January 21, 2009 / 6:24 AM / 11 years ago

UPDATE 2-Japan Dec crude steel output tumbles 28 pct yr/yr

(Adds November order data)

TOKYO, Jan 21 (Reuters) - Japan’s crude steel output tumbled 28 percent in December from the same month a year earlier, touching its lowest in nearly a decade as a deepening economic recession slashed demand for autos, construction machinery and other products.

The Japan Iron and Steel Federation said on Wednesday output totaled 7.48 million tonnes in December, the lowest since April 1999, marking the third straight month of year-on-year falls.

“Steelmakers took a hit from a fall in automotive sheet orders and a decline in exports to Asian countries,” said a spokesman of the steel industry body.

Output is expected to decline further in coming months given that industry data on orders received in November showed an even steeper fall.

The federation said last week that steel orders received in November tanked 33.4 percent to 4.49 million tonnes, the lowest in nearly four decades. The percentage fall was the biggest since the association started compiling the data in 1958.

Toyota Motor Corp (7203.T), Japanese steelmakers’ biggest customer, is cutting production along with its rivals as drivers put off big-ticket buys in the recession, leaving dealers’ lots full of unsold cars.

The world’s second-biggest steelmaker, Nippon Steel Corp (5401.T), is cutting output in the second half of the business year to March by 2 million tonnes, and Chairman Akio Mimura said this month in Seoul that a further cut was likely.

World No.3 JFE Holdings Inc (5411.T) said late last year it would shutter one of its blast furnaces and cut 4 million tonnes of output in the October-March second-half to cope with reduced demand.

Japan’s crude steel output in calendar 2008 totaled 118.74 million tonnes, down 1.2 percent but the third-highest figure on record, the industry body said. (Reporting by Yuko Inoue; Editing by Brent Kininmont)

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