November 21, 2018 / 7:47 AM / a month ago

UPDATE 1-Japan Oct crude steel output falls 4.5 pct on glitches at some mills

* Marks 2nd mth of decline, biggest monthly drop since March 2016

* Fall reflects glitches at some mills -industry association

* Domestic demand for cars, construction remains firm -assoc (Adds comment, detail)

By Yuka Obayashi

TOKYO, Nov 21 (Reuters) - Japan’s crude steel output fell 4.5 percent in October from a year earlier to 8.56 million tonnes, the second straight month of year-on-year decline, due to glitches at some mills, the Japan Iron and Steel Federation said on Wednesday.

“Production was reduced as some steel mills were having system trouble, though most of the impact from severe weather and an earthquake in September was fixed,” said a researcher at the federation.

“Local steel demand for automobiles and construction has remained strong, but steelmakers have not been able to meet demand mainly because of technical problems,” he said.

JFE Steel, Japan’s second-biggest steelmaker and a unit of JFE Holdings Inc, said last month that one of its three blast furnaces in western Japan had been shut since Oct. 23 due to technical trouble. It is expected to return to full operation in late December.

The monthly decline in Japan’s crude steel output marks the biggest year-on-year slide since March 2016, according to the federation.

October output, which is not seasonally-adjusted, increased 1.6 percent from September when Typhoon Jebi and an earthquake in the northern island of Hokkaido disrupted production at some mills.

Earlier this week, the federation’s chairman, Koji Kakigi, said he sees the nation’s crude steel output in the year to March 31 hitting similar levels to last year due to natural disasters and glitches at some plants.

Japanese steelmakers are enjoying solid local demand from automakers and machinery manufacturers as well as construction which is in full swing for the 2020 Tokyo Olympics, but repeated natural disasters and troubles at their ageing facilities have prevented them from producing as much steel as they had hoped. (Reporting by Yuka Obayashi Editing by Joseph Radford)

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