Japanese Steel Traders Aggressively Open Offshore Coil Centers

Mitsui Corporation announced on Tuesday the firm establishes a steel service center (SC) in Mexico, which is Mitsui Corp’s eighth SC in the country. Steel Technologies, the subsidiary of Mitsui & Co. (U.S.A.), establishes the SC with investment of US$ 16 million in Bajio, middle-south of Mexico, and installs one slitter with processing capacity at 140,000 tonnes per year. The SC will start operation in early 2013.

Mitsui Corp aims to secure the demand for steel sheet used for automobiles, electric appliances and building materials in Mexico. Steel Technologies is now constructing the seventh SC with annual capacity at 800,000 tonnes in Monterrey, North Mexico. Total processing capacity in Mexico will reach 1.35 million tonnes per year with these 2 new SCs.

The latest SC will become Steel Technologies’ 27th processing site in North America. The other new SC under construction in Monterrey is established with investment at US$ 75 million to start operation at the end of 2012.

Mitsui Corp acquired Steel Technologies, U.S. major steel sheet service center, in 2007. Mitsui Corp also agreed with Nucor, U.S. and world largest electric furnace steel maker, in joint operation of steel business in 2010 and established Numit, a fifty-fifty joint company. Steel Technologies is the subsidiary by Numit.

Mitsui Corp’s steel product department operates 63 SCs worldwide and the total processing capacity reaches 9 million tonnes per year. Steel Technologies’ capacity accounts for 3 million tonnes per year. Mitsui Corp lately announced SC establishment in Saint Petersburg for automotive steel sheet with capacity at 170,000 tonnes per year in cooperation with Severstal, Russian major steel maker.

Metal One, Japanese major steel business house, announced on Tuesday the firm established a coil center (CC) for automotive steel sheet, named Metal One Service Asia (Guangzhou, China), in Guangzhou, China and started operation in September. The CC provides just-in-time supply service for users, mainly Japanese automakers. The CC is operated integrally with existing CC in Foshan, China.

Chinese car production increased by 30% to 18.26 million sets in 2010 and approaches 20 million sets in 2011. In Guangzhou, 3 Japanese big automakers and many Japanese component makers have local factories. Metal One establishes the new CC when existing CC in Foshan keeps full operation. The new CC’s capital fund is US$ 12 million, wholly invested by Metal One. The CC has one large size slitter with 70 employees.

Metal One has 5 local corporations and 20 subsidiaries including CCs in China. Metal One’s China business sales exceeded originally planned 200 billion yen in 2010 and equity method profit increased by 50% year-on-year. Steel trade volume increased by 29% to 4 million tonnes in 2010 from 2009.

Metal One considers establishment of 2 new CCs in Hunan and Jiangxi, China, and raises steel trade volume in China to 5 million tonnes during fiscal 2012-2014.