Reuters reported that China's boycotts of Japanese cars over a territorial dispute will shave about 550,000 tonnes, or about 2%, off Japan's fourth quarter steel output.
A government survey of steelmakers showed that violent protests and calls for boycotts of Japanese products across China in mid September, after Japan nationalised two disputed islands, caused a drop in sales of Japanese cars there, as well as in domestic car output, in the quarter to December.
Carmakers are the biggest customers of Japan's top two steelmakers, Nippon Steel and Sumitomo Metal Corp, the world's No.2 steelmaker, and JFE Steel Corp.
The trade ministry earlier estimated the quarter's steel output at around 23.5 million tonnes.
Nippon Steel, which unveiled the survey results, said it expected a recovery in the sector's China-related business in the first quarter of 2013, while recent weakness in the yen currency would help improve the profitability of exports.
Mr Shinya Higuchi executive vice president at Nippon Steel told reporters that "China related steel sales in the first quarter won't fall as much as in the fourth quarter.”
The Japanese carmaker most exposed to China, Nissan Motor Co saw China sales slump 35% in September and 41% in October from a year earlier. But the drop this month will be around a quarter.