Slow Auto Output to Cut Japan Special Steel Bar, Wire Rod Tonnage

Japanese special steel bar and wire rod shipment should decrease in second half of fiscal 2008 ending March 2009 from original plan. The maker source said the firm revises the plan when automakers reduce the production. The steel products, which automobile and construction machinery represent 70% of the demand for, is in adjustment due to slowing activity of the major using sectors. The domestic production could decrease in fiscal 2008 from fiscal 2007 for the first time in 7 years depending on the demand.

Japanese special steel bar production increased by 6.4% to 3.534 million tonnes and the special steel wire rod output increased by 5.8% to 2.282 million tonnes in April-September from same period of 2007, according to Ministry of Economy, Trade and Industry. The demand was firm for automobile and construction machinery in the first half year. However, the demand is expected to decrease in the second half.

Japanese trading firms expect the special steel bar and wire rod transaction volume will decrease as much as 10% in October-March period. Japanese steel makers revised the domestic automobile output downward to 5.7-5.8 million units in the second half compared with 6.1 million tonnes in the same period of previous year. The automobile output is expected to decrease more.

Japanese shipment was 54,800 tonnes for cold finished special steel bar and 30,500 tonnes for special steel wire for cold heading in October, which was 7% and 11% down from a year earlier level, according to the industry association. A source of major cold finished bar maker said the shipment started to decrease since July due to slower offshore demand for automobile and office automation equipment.