Japan Special Steel Makers to Accelerate Overseas Deployment

Japanese special steel makers are accelerating overseas deployment. Some steel makers establish joint companies with large dealers to secure the demand related to automobile industry. On the other hand, steel makers reduce production cost and invest for drastic optimization in domestic major works. They hold out against overseas makers under high yen rate, high corporate income tax or electricity shortage in Japan. Mr. Tadashi Shimao, president of Daido Special Steel said cost increase of electric power might cause fatal injury on electric furnace steel industry.

Mr. Shimao said Japanese automobile makers have currently required that Japanese steel components are much expensive and Daido Steel should shift the gear to overseas local production. Japanese steel makers are facing much difficulties to compete with offshore steel makers under high yen rate. Overseas steel makers have also advanced their manufacturing technologies.

Daido Steel entered technical support contraction with Sunflag Iron and Steel, Indian special steel maker, in November 2010. The firm built foothold for overseas business through the alliance when the demand is expected to increase for special steel.

On the other hand, Daido Steel started enhancement of domestic manufacturing bases. The firm decided installation of a large size electric furnace with 150 tonnes per charge and improvement of steel making process with about 20 billion yen capex in Chita iron works in January 2011. Chita iron works will recommence operation as the world class state-of-the art special steel production site in 2013.

Moreover, Daido Steel established a joint company to produce neodymium sintered magnet with Mitsubishi Corporation, Japanese major large dealer, and Molycorp, American rare earth miner. The operation will start in Nakatsugawa City, Gifu Prefecture in January 2013. Daido Steel mulls to establish an overseas productive base of neodymium sintered magnet in the future.

Hitachi Metals announced in December 2011 the firm starts talks with Gloria Material Technology, Taiwanese special steel maker, for business and capital alliance. Hitachi Metals joins hands with an overseas special steel maker for the first time and aims expansion of special steel business in global market.

Meanwhile, Hitachi Metals announced in December 2011 the firm establishes a plant of neodymium magnet for hybrid and electric automobiles in the U.S.A. The plant installs the production line with capacity at about 40 tonnes per month with about 2 billion yen capex. This is the first productive line of neodymium magnet at overseas.

Mitsubishi Steel Mfg decided to sign a letter of intent for establishment of 2 joint companies in India with Stamp Shure & Sofmap Springs, Indian spring maker. Two joint companies produce coil spring for automobile and stabilizer, and large size coil spring for construction machinery.

Mitsubishi Steel also entered technology support contraction for production of billet for flat bar and spring with Jatim Taman Steel, Indonesian electric furnace steel maker, in mid 2010. The operation will start in 3Q 2012. The firm establishes integrated production system for flat spring in Indonesia.

Top managements of Japanese special steel makers said they also focus on generation of top technologies and human resources. They invest largely to development of human resources, technology and steel making processes.