Japan’s crude steel output is projected to fall by 2.3% year-on-year in the July–September 2025 quarter, reaching 20.1 million tons, according to the country’s trade and industry ministry (Meti). While output is expected to hold steady compared to April–June, ongoing demand weakness continues to weigh on production. The automobile and construction sectors remain key challenges, with auto-related demand forecast to rise modestly by 1.9% to 2.4 million tons. However, Meti views this as a limited rebound despite some manufacturers resuming operations following 2024’s prolonged shutdowns linked to safety testing scandals.

Cautious recovery efforts are evident, with certain automakers prioritizing quality over output volume, possibly to avoid a repeat of past controversies. Toyota, Japan’s largest car producer, was among those impacted, having halted production in mid-2024. The company has since shifted focus toward strengthening safety and quality foundations.

Meanwhile, the construction sector continues to grapple with labor shortages and elevated material costs, capping steel demand at 3.9 million tons, in line with year-ago levels. Meti noted that the overall landscape remains largely unchanged from the previous quarter, suggesting limited recovery prospects in the near term for Japan’s steel industry.