JFE Steel Produces Plate at 6 Million tonnes in F2011

Mr. Sadao Ono, chief of JFE Steel’s steel plate sector, explained at an interview with Japan Metal Bulletin that JFE Steel plans annual steel plate production at around 6 million tonnes in fiscal 2011 ending in March 2012, almost as much as in fiscal 2010 though the demand condition is unforeseeable mainly due to the effects of Japan Earthquake. He said the firm’s steel plate output in fiscal 2010 increased by about 20% to 5.5-6.0 million tonnes from the previous financial year, 50% for shipbuilding, 20% for construction and industrial machines, 20% for building and bridge materials and 10% for energy industry. The export ratio was about 30% of the total production.

Mr. Ono prospected steel plate shipment for domestic shipbuilders maintains firm in fiscal 2011. The domestic demand totaled 4.89 million tonnes in fiscal 2010, increasing from 4.77 million tonnes in fiscal 2009. The shipbuilding starts would maintained 17-18 million gross tonnes in fiscal 2010. The demand is expected to sustain the same level in fiscal 2011, he said.

Mr. Ono explained steel plate shipment for construction and industrial machines recovered to 70% against the peak level at the end of fiscal 2010. The production of the machines temporarily decreased until May after the mega earthquake while recently recovered to full operation. JFE Steel estimated carbon steel consumption for construction and industrial machines increased to 4.59 million tonnes in fiscal 2010 from 3.28 million tonnes in fiscal 2009. The firm forecasts the demand would reach 4.9 million tonnes in fiscal 2011 though Chinese demand might slow down by the government’s credit restraint policy, said Mr. Ono.

As for the domestic construction market, Mr. Ono analyzed steel plate demand is estimated to keep low in 1H of fiscal 2011 while recover in 2H to the level as high as in fiscal 2010. JFE Steel forecasts carbon steel consumption by domestic construction market at 13.2 million tonnes in fiscal 2011, almost as much as in fiscal 2010. The firm estimates steel frame demand increased by 7% to 4.18 million tonnes in fiscal 2010 from the previous fiscal year and the demand is expected to reach 4.25 million tonnes in fiscal 2011.

Steel plate demand may also increase for restoration of the disaster areas while, Mr. Ono said, the demand may emerge in and after 2H of fiscal 2011. He explained the demand is increasing for heat power plants, oil and gas stations, sewage tanks and closure plates for Fukusima atomic power plant.

Mr. Ono also referred to rapid capacity expansion by steel plate mills in South Korea and China. He explained the production capacity seems to have increased by 5 million tonnes per year in South Korea and by 10 million tonnes per year in China in late 2-3 years. Meanwhile, plate demand is increasing by double-digit per year in Asia and emerging countries, he said. Mr. Ono showed a concern that the local supply and demand balance might be affected by the rapid capacity expansion.

JFE Steel is focusing on new product development. Mr. Ono explained the firm is making strong efforts to develop extremely thick steel plate for steel tube used by energy industry, pressure container and chemical plant. The firm has recently developed extremely thick and high strength plate for YP 40, 47 grades, used for container vessels and high corrosion steel plate for tanker and ballast tank. The firm has also developed high strength plate and abrasion resistance plate for construction and industrial machines, or high strength plate, HBL 400, for building materials.