Quake Rebuilding to Create 2 Million t Steel Demand, Mr. Hayashida

Japan Iron and Steel Federation’s chairman Eiji Hayashida said to a reporter of Japan Metal Bulletin the major earthquake’s rebuilding activity creates 2 million tonnes of steel demand in 1 million tonnes each in building and civil works. However, the JFE Steel’s president said the actual steel demand will be in early 2012 due to time consuming procedure for the third extra budget.

Mr. Hayashida said world steel market is uncertain due to slow US economy, financial uncertainty in Europe and slower growth in China while Asian market is in sever oversupply after aggressive expansion in China and South Korea. However, he said world steel demand will keep growing and the steel industry has chance for further development.

Mr. Hayashida sees Japanese steel demand recovers from severe damage by the major earthquake while automotive output recovered the production level before the quake. However, he said Japanese manufacturers could shift the production to offshore plants under historical high yen rate along with limited power supply after the nuclear power accident. He said the stable power supply is a key for the domestic manufacturers and the government should secure stable energy and power supply vision to prevent offshore shift of the manufacturers.

Mr. Hayashida said Japanese steel industry entered into new era when Sumitomo Metal Industries opened integrated seamless plant in Brazil while Japanese major steel makers’ offshore activity was limited in downstream operations before. He said Japanese steel makers could replace old domestic facilities with new offshore facilities.