Japan Raw Steel Output to Rise by 4.4% in January-March

Japanese raw steel output will be record 29.246 million tonnes in January-March, which is 4.4% higher than same period of 2006, announced by Ministry of Economy, Trade and Industry on Tuesday. The output exceeds 28.87 million tonnes in January-March 1974, which was former record as the quarter. The quarterly output will decrease by 3% from October-December 2006. The output is in line with 29.1 million tonnes of estimate as of December. The integrated steel makers’ output will decrease by 420,000 tonnes in January-March from October-December due to blast furnace relining despite of the firm demand for manufacturers including automobile and shipbuilding. The electric furnace steel makers’ output also decreases by 460,000 tonnes with seasonal slow demand for construction and the special steel makers’ output will decrease by 30,000 tonnes due to fewer operation days. Japanese total raw steel output will increase by 4.2% to 117.46 million tonnes in fiscal 2006 ending March 2007 from previous year, hitting second high after 120.02 million tonnes in fiscal 1973. METI said the production plan keeps firm due to firm domestic demand for manufacturers despite of seasonal slower demand for construction. However, the ministry said the steel industry depends more on manufacturers. METI warns the high level inventory when the domestic hot, cold and coated sheet inventory increased by 80,000 tonnes at the end of December from November, especially for 100,000 tonnes higher stock by makers while distributors’ and coil centers’ stock decreased. METI said the international steel trading market faces potential trade conflict with China’s high level export to USA and Europe along with depressing US steel market and some loss making companies including AK Steel. METI said Japanese steel industry should keep cautious to balance supply and demand under the condition.