Japan's steel exports last year fell to their lowest since 2011, dented by a surge in shipments from China.

Steelmakers around the world are grappling with the fallout of massive exports of cheap steel from China, with producers there turning overseas as local appetite wavers due to the country's slowing economy.

Steel exports by Japan, the world's second-biggest steel producer, dropped 1 percent to 41.27 million tonnes last year, marking a second annual decline and hitting the lowest since 2011, preliminary data from the Ministry of Finance showed on Monday. In 2011, output was disrupted after parts of the country were devastated by an earthquake and tsunami.

Exports from Japan may fall further in 2016 as steel prices remain at multi-year lows, crimping export margins, while the recent surge in the yen against the U.S. dollar makes Japanese goods more expensive in foreign markets.

Top Japanese steelmakers, which export more than 40 percent of their output, have been squeezed hard by Chinese steel manufacturers using surplus output to boost exports.

Reflecting soft demand at home, China's steel exports surged by nearly a fifth last year to a record 112.4 million tonnes, fuelling a plunge in steel prices to 12-year lows and driving scores of countries to slap anti-dumping duties on Chinese steel, as well as sparking mill closures.

China makes half the world's 1.6 billion tonnes of steel and has overcapacity of about 400 million tonnes.

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