Japanese steel producer JFE has cut its crude steel production outlook following weaker than anticipated steel demand in the domestic construction industry.
JFE revised downward its crude steel output to 22.4mn t for the current fiscal year ending 31 March 2025, said the company on 6 November. This is 600,000t lower than its initial plan announced in August, it added.
The downward revision is mostly attributed to weaker than anticipated steel demand from the domestic construction sector, according to the steel producer. Rising material costs and labour shortages are causing delays in major construction projects, JFE said, adding that lower steel demand in the construction industry is "becoming even more obvious".
The overseas market is also sluggish especially because of lower automobile sales in the southeast Asian market, JFE added. Higher borrowing costs along with stricter loan screenings for purchasing automobiles in the region are weighing on car and steel demand, the Japanese producer said.
The company also expects ample supply and subdued demand to persist in the overseas market following an oversupply of the steel products by Chinese firms, JFE added.
The Japanese producer posted a net profit of ¥42.5bn ($276mn) for the first half of the 2024-25 fiscal year, down by 61pc from a year earlier, according to JFE.
