Japan Steel Industry Expects Largely Output Cut against Dropped Demand

Chairman Shoji Muneoka of Japan Iron and Steel Federation said at monthly press conference on Friday Japanese steel industry should reduce the output and adjust the supply and demand when steel demand is dropping. The chairman said steel inventory in the market is increasing when actual demand is dropping by reduced manufacturing industry activity and users are adjusting the inventory across all levels of manufacturing industry. The chairman appealed the necessity of supply adjustment.

Mr. Muneoka said the state of the economy is very severe and the industry for steel demand is making a downward revision for the output and earnings forecast due to world recession. Mr. Muneoka expects many countries carry into effect largely economic measures and financial crisis is untied without further delay.

Mr. Muneoka suggested the possibility Japanese crude steel decreases more than the forecast of Ministry of economy, Trade and Industry which drop to 21 million tonnes by 10 million tonnes in January-March from the same period of last year when users are strongly adjusting the inventory.

Mr. Muneoka said it is positive trend that ferrous scrap market price is rising due to increasing Chinese demand, but decreased generation volume of ferrous scrap is pulling up the ferrous scrap price. Mr. Muneoka analyzed decreased level of manufacturing industry activity has an impact ferrous scrap price.