Kobe Steel Builds up Iron Powder Business

Kobe Steel, Japanese major steel maker, improves profitability of the iron powder business in fiscal 2008 ending March 2009. The firm raised the selling price by 25,000-30,000 yen per tonne for the shipment in April and examines another hike for the shipment in October if material price continues surging. The firm increases the production capacity of Takasago works by 400 tonnes to 7,000 tonnes per month with the investment of 100-200 million yen within this year. On the other hand, the firm suspends the operation of no.1 line among 2 productive lines in US subsidiary to improve profitability.The firm’s iron powder output is exceeding the target volume along its mid-term business plan, while the profit is impacted by rising material costs. Consequently the firm improves the production efficiency and passes higher material costs on the selling price. Moreover, the firm builds up the production capacity and plans next large investment to increase the capacity to over 7,000 tonnes per month when automobile production is increasing and the demand for power metal part keeps high level.Kobelco Metal Powder of America, Kobe Steel’s subsidiary, is reducing the output by 20-30% due to slower production of the Big Three, which will enhances the production system by reduced output or promotion of streaming.Japanese iron powder demand increased to 128,000 tonnes in fiscal 2006, and to 135000 tonnes in fiscal 2007, and is expected to increase to 140,000 tonnes in fiscal 2008.