Preliminary data released Tuesday by the Japan Iron & Steel Federation (JISF) showed that the country's steelmakers both integrated mills and mini-mills were more productive during this year's January-June half than many had expected, with output reaching 40.4 million tonnes, lower by just 0.4% from H1 last year.

By process, the blast-furnace steelmakers produced 29.72 million tonnes, lower by 0.4% on year, while electric-furnace makers produced 10.68 million, lower by just 0.3% from H1 last year.

The results support an observation made a week earlier on July 15 by the country's Ministry of Economy, Trade and Industry (METI) when forecasting the steel sector's likely performance during the present July-September quarter.

Touching on output to date, the METI had predicted that crude steel production for April-June would be 20.62 million tonnes, which it noted would be some 600,000 tonnes above the ministry's initial forecast issued at the start of the quarter in April.

"It appears that the results (for April-June) will have exceeded the previous year's results for the first time in 10 quarters since the October-December 2023 period," METI had said on the assumption that its prediction would prove accurate.

The ministry was half right, the JISF numbers show. The April-June total reached only 20.35 million tonnes – for an increase of about 300,000 tonnes, not the 600,000 METI had earlier predicted – but this was still 1.3% higher on year and supported the industry view that since spring, production has been picking up.

During June, daily crude steel production averaged 227,000 tonnes, higher by about 3,000 t/d compared to May. "However, the annualized rate for 2026 remains below 83 million tonnes, so a full recovery is not yet expected," industry daily Tekko Shimbun warned.

For the record, METI expects crude steel output this quarter to reach 20.18 million tonnes – which would be lower than April-June but higher than July-September last year by the same 1.3% and still above the threshold of 20 million tonnes/quarter, Mysteel Global notes.

The pickup in raw steel output so far this year reflects improving demand from major end-user industries, according to Takashi Hirose, executive vice president of Nippon Steel.

Commenting to Japanese media following a meeting of the JISF's Steel Industry Roundtable last Wednesday, Hirose observed that the Japanese economy is "recovering gradually". Steel demand from the construction sector remains firm and the machinery and electrical equipment sectors continue to perform well, he said, but admitted that steel demand from the automobile industry is "flat".

The JISF statistics show that during H1, output of steel for sale to these end-users – such as rebars and wire rods for building construction and hot- and cold-rolled coils for auto-manufacturing – was lower on year. But that was not the case for one sector which Hirose failed to mention, namely shipbuilding.

New data released by the Japan Ship Exporters' Association showed that new orders received for ships for export last month totalled 1.41 million gross tons, up 4.1% on year, which took the January-June total to 5 million GT, lower by just 0.3% on year. Given the chaos that shipowners globally have endured this year due to the Middle East hostilities, a 0.3% on-year reduction in orders is probably an excellent result.

Moreover, as of end-June, the Japanese shipbuilders were nursing orders totalling 30.09 million GT in 628 ships – equivalent to about 3.5 years' worth of work.

During January-June, the Japanese mills produced 4.05 million tonnes of heavy plates including ship plates, up 3.6% on H1 last year, the JISF statistics show.