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Japan crude steel output rises for 4th month on firmer exports
[TOKYO] Japan's crude steel output in July rose for a fourth month in a row as steelmakers increased production to meet export demand, gaining again over a period last year when high inventories and slow domestic demand had forced Japanese mills to trim output.
July crude steel output climbed 0.5 per cent from a year ago to 8.89 million tonnes, the Japan Iron and Steel Federation said on Tuesday. Output, which is not seasonally-adjusted, increased 1.3 per cent from June.
The increase comes despite a series of weak economic signals that have raised doubts about Japanese Prime Minister Shinzo Abe's efforts to reignite growth and end decades of deflation.
Japanese manufacturers' mood soured in August to its lowest since 2013, a year the central bank embarked on aggressive monetary easing to fight a stagnant economy, a Reuters poll showed last week. The results of the Reuters Tankan survey highlight the continuing weakness of an economy facing declining exports and sluggish consumer spending.
"The gains in steel output were limited as domestic demand for automobiles and construction has not recovered much," a researcher at the federation said, pointing to the output of hot-rolled steel products, which fell in July for the 21st straight month.
"Exports were solid ... thanks to a recovery in steel prices overseas, but Japanese industry officials are worried the recent surge in the yen may weigh on exports later this year," he said.
Shanghai steel futures have climbed more than 50 per cent this year on hopes that China will succeed in its efforts to curb excess capacity in its bloated steel sector.
The yen has risen 16 per cent against the dollar this year on safe-haven demand after the "Brexit" vote unleashed uncertainty in global financial markets, potentially hurting the fragile and export-reliant Japanese economy.