JFE Steel cuts crude steel production forecast for 2024-2025 fiscal year to 22 million tons in Japan

JFE Steel A203 Grade E steel, the second largest steel manufacturer in Japan, announced on February 6th that it will lower its crude steel production forecast for the 2024-2025 fiscal year (ending March 31, 2025) from 22.4 million tons to 22 million tons, a cumulative decrease of 1 million tons compared to the forecast made in early August last year (23 million tons), a year-on-year decrease of 6.2%. This is the second time the company has lowered its production target since November last year, reflecting the multiple structural challenges facing the global steel industry.

Despite the sustained demand in the A203 Grade E steel automotive and shipbuilding industries, JFE Steel expects that the market will not experience significant growth until the start of fiscal year 2025. Due to rising material costs and labor shortages, large-scale infrastructure projects (such as urban renewal) in China have been delayed, with only small and medium-sized projects maintaining low levels of demand. In addition, with its cost advantage, China's finished steel exports increased by 22.7% to 1107.16 million tons in 2024, becoming the second highest level since 2015, further expanding its market share in Southeast Asia, the Middle East and other regions, posing challenges for Japanese and Korean steel companies.

JFE Steel reiterates its commitment to invest 329.4 billion yen (approximately 2.2 billion US dollars) in the construction of an electric arc furnace project with an annual output of 2 million tons, expected to be put into operation in 2028. This project will be promoted with the support of the Japanese government and is expected to become an important breakthrough in the domestic green steel A203 Grade E steel market.