Mr. Hayashida of JISF Views Japanese Crude Steel Output Keeps 107MT in F2011

Mr. Eiji Hayashida, chairman of Japan Iron & Steel Federation, attended a regular press conference in Tokyo on Tuesday and viewed Japanese annual crude steel production could keep above 107 million tonnes for fiscal 2011 ending in March 2012. He pointed out world economy is obviously slowing down and flood in Thailand is a new negative phenomenon. Meanwhile, he suggested Japanese crude steel output would not decrease by more than 1 million tonnes from estimated 107 million tonnes for fiscal 2011 despite of the circumstance.

He explained World Steel Association’s latest demand forecast, which indicates world steel demand could increase by 5.4% to 1.4736 billion tonnes in CY2012 from CY2011, also involved unstable economy in developed countries and economic growth declaration in emerging countries. Mr. Hayashida said WSA’s forecast would be scarcely impacted by Thai flood.

As for Trans-Pacific Partnership (TPP), Mr. Hayashida emphasized Japanese government should have crisis mentality on domestic deindustrialization and decide entry in TPP precociously for the country’s future. He added it should be against the diplomatic rule to join TPP’s negotiation just for collecting information and defect from the framework finally. Japanese government should enter the framework with a firm intention, he said.

Mr. Hayashida also referred to extremely strong yen trend. He said yen exchange rate at 76 yen per US dollar is too beyond Japanese manufacturing industry’s durability. He suggested hollowing-out of Japanese manufacturing industry would be accelerated by high tax, nonparticipation in TPP and ultra strong yen trend. He requested Japanese government and Bank of Japan should take strong provisions against too strong yen rate as early as possible.

Meanwhile, he told ferrous scrap market price and electric furnace steel prices are recently lowering as well as spot market prices are declining for coking coal and iron ore. Mr. Hayashida said market price of common grade steel products would weaken while it is unclear whether steel prices for specific users increases or decreases since raw material costs for January-March 2012 hasn’t been fixed.