Japan Seamless Pipe Supply to Get Tighter

Tight supply of seamless pipe is expected to get serious under limited supply when Sumitomo Metal Industries and JFE Steel plan regular maintenance and expansion works in October-March period though the supply is already getting tighter due to strong demand at home and abroad. Japanese seamless pipe export increases mainly for high grade products when oil majors increase the development of new resources under high crude oil price. Japanese demand also increases for construction and industrial machinery, shipbuilding and chemical plants. The supply is getting tighter in domestic market when the demand increases year by year since 2002 though the domestic demand experienced long slump before. The domestic supply is expected to decrease temporally when Sumitomo Metals and JFE Steel plan regular maintenance and expansion work in half year to March 2007. Sumitomo Metals plans maintenance at mid-size mill at Wakayama and a mill at Kainan in October-December. JFE Steel plans to expand 13% chrome oil well tube output capacity at Chita in October-December. The makers will reduce the order received from domestic users in half year to March 2007 when the demand is more than expected.