Demand Slump to Slow Japan Special Steel Bar, Rod Output

Japanese special steel and wire rod output growth should slow down in fiscal 2008 ending March 2009 compared with fiscal 2007. The production increased in April-September from same period of 2007, according to the maker source. However, the output could be lower in October-March period compared with plans as of April when automakers and construction machinery makers revised the output plan in the second half year.

The special steel bar and wire rod output increased by 5.4% to 11.367 million tonnes in fiscal 2007 from fiscal 2006, according to Ministry of Economy, Trade and Industry. METI reported the output increased by 6.6% to 2.918 million tonnes for steel bar and by 6.0% to 1.892 million tonnes in April-August from same period of 2007. The output growth slowed down when it increased by 0.3% to 534,000 tonnes for bar and by 1.5% to 337,000 tonnes in August from a yea earlier.

The industry sees the output usually decreases in August due to steel makers’ regular maintenance and automakers’ summer holiday outage. However, automakers reduce the output and the output could decrease in and after November from a year earlier level.

The makers recognize the supply gets less tight when the demand decreases for cold finishing bar and cold heading processing while the supply was very tight despite of the full capacity. The makers still try to find the trend if the supply would meet the demand or the makers should adjust the output.