October 23, 2019 / 8:36 AM / a month ago

UPDATE 1-Japan July-Sept crude steel output falls to lowest in 10 yrs

* July-September output marks fifth straight quarterly drop

* Drop reflects plants suspensions due to typhoon and fire

* Delayed construction projects slow output at electric-arc furnaces (Recasts with quarterly data, comments and background)

By Yuka Obayashi

TOKYO, Oct 23 (Reuters) - Japan’s crude steel output in the July to September period fell to its lowest in 10 years after some plants were shut following typhoons and fires, while construction delays reduced demand, the Japan Iron and Steel Federation said on Wednesday.

Crude steel output slid to 24.55 million tonnes in the three months to Sept. 30, down 4.3% from the same period a year earlier, and the fifth consecutive quarterly drop, a researcher at the federation said.

Japan’s biggest steelmaker, Nippon Steel Corp, said earlier this month one of the two steelmaking plants at its Kimitsu Steel Works will be shut until the end of December to repair a chimney that collapsed in a typhoon last month.

Another steelmaking plant at Nippon Steel’s subsidiary in Hiroshima, Kure Works, has also suspended operations since a fire damaged its operating room in late August.

“In addition, some construction projects have been delayed due to a shortage of labor, slowing output at electric-arc furnaces,” the federation’s researcher said.

Crude steel output in September declined 4.5% from a year earlier to 8.05 million tonnes, a third straight monthly loss. Output, which is not seasonally-adjusted, decreased 0.9% from August.

Crude steel output in the April to September period fell 3% from the same period a year ago.

Despite a weakening Asian steel market amid the U.S.-Sino trade war, Japanese steelmakers are seeing solid local demand from automakers and the construction sector, which has been driven by higher public spending on infrastructure to guard against big disasters.

But natural disasters and glitches at aging steel facilities have prevented them from producing as much steel as they had planned, weighing on their profits.

Reporting by Yuka Obayashi; Editing by Christian Schmollinger

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