According to Japan Metal Daily, the Ministry of Economy, Trade and Industry (METI) of Japan forecasts steel output in Q3 2025 to remain at the same level as in the corresponding period in 2024. The production plans published by the Ministry show an expected output of 20.62 million tons, a slight increase of 0.1% year-on-year, marking the first quarterly growth since the end of 2023.

However, steel producers in Japan continue to maintain low production levels due to persistently weak domestic and international demand. The uncertainty regarding the potential impact of new US tariff policies is further complicating the outlook.

Causes and Trends

Domestic demand remains sluggish across most sectors. The construction industry continues to face delays due to labor shortages and rising costs, while the automotive sector is suffering from low actual demand. Therefore, steel producers are approaching production planning cautiously.

Total steel product output is expected to reach 18.10 million tons in Q3, a 3% quarter-on-quarter increase.

Opportunities and Risks

A trade agreement between the US and Japan was signed in July this year. Japan will invest $550 billion in the US and will impose a reciprocal tariff of 15%. However, the US tariff of 50% on steel and aluminum imports was not included in the agreement.

Therefore, Japanese steel producers need to closely monitor changes in US tariff policies to ensure competitiveness and maintain stable output levels.