Japan Special Steel Bar, Wire Rod Supply to Get Tighter

Japanese supply of special steel bar and wire rod is expected to get tighter in the period from October to March 2008 when automobile and construction machinery output increases from April-September. Japanese special bar and rod makers increase the export. The supply gets tighter when the makers operate at full capacity and have no reserve capacity. The domestic output of special steel bar and rod was 10.8 million tonnes in fiscal 2006 ended March 2007, which was 1.5 times of the recent bottom in fiscal 1998. Automobile applications represent around 50-60% for the demand while construction machinery is around 20%. The high activity by major using industries lifts the demand level. Japanese automobile output is expected to be 11.5 million units for finished car and 8.2 million units for knockdown sets for fiscal 2007 compared with 11.5 million units and 7.9 million units respectively in fiscal 2006. An integrated steel maker source said the knockdown sets output could reach 8.3 million units in fiscal 2007. Japanese construction machinery shipment is expected to reach 2.35 trillion yen in fiscal 2007 compared with more than 2 trillion yen in fiscal 2006, which was more than double of shipment in fiscal 2001. Japanese special steel bar and rod makers keep full capacity operations to meet the strong demand. However, the steel source is limited when the integrated steels try to increase the supply of shipbuilding plate and automotive flat steel. With the limited supply resource, the special steel bar and rod makers’ supply could get tighter more than current condition.