The Japanese steel industry, which is largely export-oriented, continues to face challenges due to the tariff policies of the Trump administration. Trade restrictions on steel significantly impact export volumes and the state of the domestic market.
This is reported by Finway
Impact of U.S. Tariff Policy and Market Situation
The chairman of the Japan Iron and Steel Federation (JISF) and president of Nippon Steel, Tadashi Imaï, emphasized at a briefing that the Japanese steel industry is increasingly participating in trade measures aimed against China due to the rise in Chinese steel exports. According to him, this trend will continue into next year, and the operating environment for the industry will remain challenging in the financial year 2026/2027, which begins on April 1, 2026. Experts estimate that the recovery of steel demand will take more time.
“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 more time will be needed for the recovery of steel demand.”
Forecasts for Steel Demand and Production
The Ministry of Economy, Trade and Industry of Japan (METI) has also expressed pessimistic expectations regarding domestic and export steel demand in the first quarter of 2026. According to the ministry’s estimates, total steel demand from January to March 2026 will amount to 18.6 million tons, which is a 1.6% decrease year-on-year and only a 0.1% increase compared to October-December of the previous year. Steel production in Japan for the financial year 2025/2026 is likely to reach 20.05 million tons, which is a 1.7% decrease compared to the same period last year.
Additionally, the ministry noted that the development of the construction sector is being hindered by a labor shortage and rising material costs. Other manufacturing sectors, except for the automotive industry, are also not showing significant recovery. JISF shares these concerns, predicting only a slight increase in civil construction volumes due to increased public works reserve funds; however, the issues of labor shortages and high prices will remain relevant.
Regarding industrial demand, particularly from the automotive sector, a decrease is expected compared to the 2025/2026 financial year. The domestic steel market, in addition to the impact of U.S. tariffs, will also face pressure from China’s active export activities in selling electric vehicles to ASEAN countries, which indirectly affects Japanese manufacturers.