October 22, 2018 / 11:48 AM / a month ago

Japan September crude steel output falls 2.4 percent year-on-year on natural disasters

TOKYO (Reuters) - Japan’s crude steel output fell 2.4 percent in September from a year earlier to 8.42 million tonnes, the Japan Iron and Steel Federation said on Monday, reflecting a disruption in production at mills located in the areas hit by Typhoon Jebi and an earthquake.

FILE PHOTO - A man works among steel rods at a steel collection facility in Tokyo, Japan, October 30, 2015. REUTERS/Toru Hanai

In early September, Typhoon Jebi, the most powerful storm to hit Japan in 25 years, killed 11 people, injured hundreds and stranded thousands at flooded Kansai International Airport in western Japan.

Just days later, a powerful earthquake paralyzed Japan’s northern island of Hokkaido, killing at least seven people, triggering landslides and knocking out power to its 5.3 million residents.

“Some steelworks in the areas which were battered by severe weather and earthquake were forced to cut production,” said a researcher at the Japan Iron and Steel Federation.

“But domestic steel demand for automobiles and construction remained healthy,” he said.

The monthly decline comes after crude steel production rose in August and marks the biggest year-on-year slide since July 2017, according to the federation.

September output, which is not seasonally-adjusted, decreased 4.4 percent from August.

For the July-September quarter, crude steel output fell 1.1 percent from a year earlier to 25.64 million tonnes, booking the first quarterly loss in a year.

The output in July was also trimmed by torrential rain in western Japan which caused the country’s worst weather disaster in 36 years, killing 200 people.

But for the April-September half, the number inched up, rising 0.3 percent, to 52.21 million tonnes.

Japanese steelmakers are enjoying solid local demand from automakers and machinery manufacturers as well as construction which is in full swing for the 2020 Tokyo Olympics, but repeated natural disasters have prevented them from producing as much steel as they had wished for.

Reporting by Yuka Obayashi; Editing by Emelia Sithole-Matarise

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