The steel industry in Japan is under serious pressure due to the tariff policy of the Trump administration, which has led to a blockage of steel trade flows. The Japan Iron and Steel Federation (JISF) reports a significant impact of these restrictions on the country’s export-oriented industry.
This is reported by Finway
Challenging Situation in Japan’s Steel Market
JISF Chairman and Nippon Steel President Tadashi Imaï emphasized that Japan is increasingly compelled to engage in trade measures from other countries and regions aimed at countering the expansion of Chinese manufacturers. According to him, this trend will continue into next year, and it will take even longer to restore demand for steel. He stressed that the situation for the Japanese steel industry in the financial year 2026/2027, which begins on April 1, 2026, will remain as challenging as in the previous period.
“Tadashi Imaï warned: the environment for the Japanese steel industry in the next financial year (2026/2027, starting April 1, 2026) will remain the same as in the previous financial period, and it will take more time to restore demand for steel.”
Forecasts for Steel Demand and Production
The Ministry of Economy, Trade and Industry of Japan (METI) has provided a pessimistic forecast for January-March 2026 regarding domestic and export demand for steel. Ministry experts note that growth in the construction industry is being hindered by labor shortages and rising material costs. Other manufacturing sectors, apart from the automotive industry, are also not showing signs of recovery.
According to METI estimates, total steel demand in Japan in the first quarter of 2026 is expected to be 18.6 million tons, which is 1.6% less than last year and only 0.1% more than in October-December of the current financial year. Steel production volume in the last quarter of the 2025/2026 financial year is expected to be 20.05 million tons, which is 1.7% less year-on-year.
JISF also expressed concerns about market prospects for the next year. While a slight increase in civil construction is possible due to increased budget allocations for public works, the industry continues to face labor shortages and rising material costs. Industrial demand, especially in the automotive sector, is projected to be lower than in the 2025/2026 financial year. In addition to the impact of US tariff policy, the domestic steel market in Japan will also feel pressure from China’s export strategy aimed at selling electric vehicles to ASEAN countries.