Nippon Steel Expects Japan Short Plate Supply

Japanese plate steel demand is more than 2.85 million tonnes in January-March, which is around 200,000 tonnes higher than July-September, 2007 level, according to Nippon Steel. The firm expects Sharp Corporation’s new Sakai plant building consumes around 100,000 tonnes of structural steel along with strong demand for shipbuilding and construction and industrial machinery. The supply is likely not to increase widely. Nippon Steel expects the supply balance gets tighter toward fiscal 2008. The demand increases to more than 1.2 million tonnes for shipbuilding compared with 1.16 million tonnes in July-September, which is the latest official figure. Domestic shipbuilders keep 3-4 years of order backlog under strong worldwide demand for ocean transport. Their steel consumption increases gradually. The demand increases to around 280,000 tonnes for construction machinery and to around 260,000 tonnes for industrial machinery in January-March, which are around 20,000 tonnes and 30,000 tonnes higher than July-September level. The building demand increases in January-March when Sharp builds new plant, which consumes 150,000-160,000 tonnes of structural steel and around 70% of that in January-March. Nippon Steel expects the other building demand is flat as around 320,000 tonnes in July-September. Nippon Steel sees the distributors’ plate demand is 360,000-370,000 tonnes in January-March, which is in line with July-September level with higher demand for construction and industrial machinery and lower demand for building. Nippon Steel expects the domestic plate supply is peak in half year to March 2008 and the supply cannot increase in short period of time despite of effort by the makers. The firm expects the supply is around 400,000 tonnes short for the demand both in half year to September 2008 and half year to March 2009 with higher demand.