Japan 5 Integrated Steels to Increase Crude Steel Output for July-September

Crude steel production by Japanese 5 integrated steel makers is expected to reach 21.3 million tonnes for July-September, almost as much as the output volume in the corresponding period of 2010 though they would adjust steel supply along decreasing export under strong yen trend and increasing steel sheet inventory in domestic market. The 5 makers would increase the output more for October-December when domestic car production is expected to ncrease. Thus the half-year production is estimated to decrease by 4% year-on-year to 41.2 million tonnes for April-September 2011 while to exceed 43 million tonnes for October 2011-March 2012.

For April-July, the 5 makers’ crude steel production decreased to 19.89 million tonnes. Steel demand decreased from automobile industry since supply chains were downed by Japan Earthquake. In addition, Kashima iron works of Sumitomo Metal Industries was hit by the earthquake. The 5 makers’ 3-month crude steel production represented below 20 million tonnes for the first time since April-June 2009 and July-September 2009 after Lehman’s fall.

For July-September, the integrated steels should reduce steel inventory when domestic inventory of hot, cold and surface treated steel sheets increased 4.22 million tonnes at the end of June. Meanwhile, Japanese steel export is decreasing and the import is increasing due to high yen rate and low Asian steel market price. Domestic car production is forecasted at around 3.8 million sets for April-September 2011 and above 5.3 million sets for October 2011-March 2012, according to a source of one integrated steel maker.

Mr. Shinichi Taniguchi, vice president of Nippon Steel, said Nippon Steel’s crude steel output is planned at around 15.7 million tonnes for April-September while expected to maintain 8 million tonnes per quarter for October 2011-March 2012. JFE Steel forecasts the firm’s crude steel production at 13.7 million tonnes for April-September 2011 and 14.3 million tonnes for the second half of fiscal 2011. Sumitomo Metals forecasts the output at 6.2 million tonnes and 7.1 million tonnes. Kobe Steel forecasts 3.7 million tonnes and 3.8 million tonnes. Nisshin Steel’ forecast is 1.9 million tonnes and near 2 million tonnes.