Q3 2025 Steel Production to Hold Steady Despite Market Pressures
Japan’s steel sector expects output to stabilize in the third quarter of 2025, reflecting cautious optimism amid challenging conditions. Steelmakers forecast a total output of 20.62 million tonnes between July and September. This marks a modest year-on-year rise of 0.1%, the first quarterly growth since late 2023.
However, Japan’s steelmakers continue to maintain conservative production levels. Weak domestic demand, coupled with global market sluggishness, has pressured output volumes for over a year. Ongoing uncertainty surrounding new US tariff measures also clouds long-term planning. Despite recent progress in US-Japan trade talks, the 50% tariffs on steel and aluminum remain untouched by the new agreement.
Japan Steel Output Faces Demand Challenges Across Key Sectors
The domestic construction and automotive sectors continue to show weak performance. Labor shortages and rising costs delay construction activity. Meanwhile, carmakers face low real demand, further limiting steel consumption. As a result, producers remain cautious, scaling production to current demand levels rather than anticipating recovery.
Still, forecasts indicate some positive movement. Total steel product output for Q3 2025 is expected to reach 18.10 million tonnes, a 3% increase from the previous quarter. But analysts warn this short-term uptick does not signal sustained recovery unless external demand improves and tariff-related uncertainties ease.
In July, Japan and the United States signed a new investment agreement. Japan committed to a $550 billion investment in the US and accepted a 15% reciprocal tariff on selected products. However, the agreement left high steel and aluminum tariffs in place, complicating Japan’s global trade strategy.
SuperMetalPrice Commentary:
Japan’s Q3 2025 steel output forecast reflects strategic caution in an unpredictable trade and demand environment. The slight year-on-year growth, while symbolically important, does not shift the underlying narrative of weak domestic demand and export headwinds. With construction and automotive sectors showing little momentum, Japan’s steelmakers are wisely focusing on volume stability over expansion. The unresolved US tariffs continue to limit market access, emphasizing the need for Japan to diversify trade partnerships and enhance domestic value chains. Any real recovery will depend on structural reforms and improved global demand conditions.
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