The deepening serious stagnation of the Japanese steelmaking industry exerts an inevitable influences directly to the demand of onsite gases and the supply capacity of co-produced liquid gases. The Japan Iron and Steel Federation announced that the output of the Japanese crude steel in May substantially decreased by 31.7% to 5.92 million tons.

Though a slight increase was lasting from January to February, it turned out to be a decrease by 12.5% in March, 24.0% in April and 32.7% in May which was a three-month negative result in succession. It should be pointed out with anxiety that the extent of decrease has been getting larger.

It is attributed to the overall stagnation of the overall Japanese economy including the automobile industry due to the coronavirus infection, but Japan’s export also decreased after a lapse of five months by 17.7% of 2.501 million tons on an all-steelmaking basis. In terms of steel by type, galvanized steel sheet decreased by 21.7% of 144 thousand tons and cold-rolled wide steel strip by 46.2% of 101 thousand tons respectively. Both decreased for two consecutive months.

The trouble is that China is increasing its production to a great extent. The National Statistics Bureau of China announced that its production of crude steel in May marked a record-high figure of 2.976 million tons, and seems to get close to 100 million tons (92.256million) per month (31 days).

The Chinese economy is in recession now and the Chinese Government is implementing a huge public investment, intending to increase also employment. It might be deemed as a Chinese version of the New Deal Program, but is calling various aftermaths. Supposedly due to Chinese hunting for iron ore over the world, the price of iron ore is rapidly hiking. According to the World Bank, it has suddenly risen up to US$95.76/DMTU* in January, US$87.68 in February, US$88.99 in March, US$84.73 in April, US$93.65 and US$103.3 in June 2020.
Note: *DMTU stands for dry metric ton unit price for ferrous content per 1%.

In June it was added by the factor that there occurred a closure of iron ore mine under the coronavirus infection in Brazil.

As for the Japanese iron and steel manufacturers, they report that their business has worsened due to the declined demand under the stagnation and the sudden hike of iron ore for the raw material. There also lies an anxiety of further integrations of blast furnaces. A careful attention should be taken from the viewpoint of the industrial gas market.