Japan’s crude steel production, the world’s third-largest producer, fell 7.4% in 2022 from a year earlier due to a slow recovery in auto production and weak export demand amid a slowdown in the global economy.

Figures from the Japan Iron and Steel Association showed production fell for the first time in two years to 89.23 million tonnes.

During the COVID-19 pandemic, Japan’s Toyota Motor Corp. did better than most automakers in managing supply chains. However, it fell victim to a protracted thin sheet shortage last year, repeatedly slashing monthly production targets.

“Domestic steel demand was hit by repeated delays in recovering auto production, while external demand also weakened in the second half of the year due to higher inflation and higher interest rates in the United States and Europe,” said a researcher at the Association.

“Meanwhile, Japanese steelmakers have reduced the number of blast furnaces, which means that it will be difficult for Japanese steel production to return to the 100 million ton level from a supply capacity point of view even if demand rises,” he said.

Steel production in the fourth quarter of 2022 decreased by 11.5% from a year earlier to 21.42 million tonnes.

Production decreased by 13.1% in December from a year earlier to 6.9 million tons and down by 3.8% from November.