Japan Integrated Steels Expand Galvanized Sheet Output in FY2006

Japanese integrated steel makers start the operation of continuous galvanizing lines (CGL) in fiscal 2006 ending March 2007, hot-dip galvanizing lines for steel sheet which were newly established or renewed at their works. Nippon Steel will start the operation of renewed CGL at Kimitsu and Nagoya works this summer and newly established CGL at Hirohata works in December 2006. JFE Steel advances the construction of new CGL at West Japan works in order to start its operation in early 2007. Sumitomo Metal Industries also establishes CGL at Kashima works. Total CGL output capacity will increase by around 20%, 1.55 million tonnes per year at Japanese 4 integrated steels. Two joint ventures in China will also start commercial operation of CGL in which Japanese integrated steels invest. Integrated steels hurry to cover demand for galvanized steel sheet both domestically and overseas, when Japanese automobile makers expand especially offshore production.Japanese auto makers’ auto production was likely to reach 10.8 million units in 2005 domestically, increasing for 4 straight years, and rise sharply to above 10 million units at overseas. Fourin, Japanese research organ of world automotive markets, forecasts Japanese auto makers’ production could increase by around 4 million to 25 million units in 2010. Usage volume of galvanized steel sheet is 300-400 kilogram for one automobile. Steel sheet demand could increase by 1.2-1.6 million tonnes with the auto production growth.Shanghai Baosteel-NSC/Arcelor Automotive Steel Sheets, the JV of Nippon Steel, Baoshan Iron & Steel and Arcelor, enters full operation in near future which started commercial production at the end of March 2005. Guangzhou JFE Steel Sheet Company, the JV of JFE Steel and Guangzhou Iron & Steel Enterprises Holdings, plans to start commercial operation by April 2006. CGL output capacity of 2 JVs is totally 1.2 million tonnes per year.Japanese integrated steels expand CGL output capacity by 2.75 million tonnes in Japan and China. They plan to supply galvanized steel sheet not only for Japanese auto makers but for other users including non-auto-related. Integrated steels forecast their CGL output capacity would balance with the market volume in 3-4 years, though the capacity exceeds the demand for a while after the operation start.