"A slowdown in overseas economy and disruptions in supply chains due to the coronavirus outbreak are expected to reduce industry demand for steel, especially in automobiles," Tomoya Hasui, director of the METI's metal industries division, told an online news conference.
He also warned these figures could deteriorate as the estimate does not fully reflect the shutdown plans announced recently by Japanese automakers.
Automakers worldwide have been halting production at plants as they grappled with the pandemic and the slump in demand.
The ministry estimated crude steel output to be 19.36 million tonnes in the April-June quarter, compared with 26.12 million tonnes a year earlier. The previous seven quarters witnessed year-on-year declines.
Crude steel output in Japan, the world's third-biggest steel producer, is forecast to have dropped to 23.59 million tonnes in January-March from 24.97 million tonnes a year earlier.
The estimated output for the current quarter will mark the lowest since April-June 2009, when a financial crisis had eroded global demand.
Demand for steel products, including those for exports, is forecast to fall 18.1% to 18.28 million tonnes in April-June, compared with last year, the ministry said, citing an industry survey.
Exports are forecast to dive 21.4%, the ministry said.
To cope with the dwindling demand, steelmakers are now trimming production.
Nippon Steel Corp, Japan's biggest steelmaker, said earlier this week that it will temporarily shut two blast furnaces in Japan later this month, cutting about a tenth of its capacity.
(Reporting by Yuka Obayashi, Editing by Sherry Jacob-Phillips)
By Yuka Obayashi
