Steel Supply to Keep Normal Despite of Coal Supply Issue, JISF Top

Japan Iron and Steel Federation’s Chairman Eiji Hayashida said at monthly press conference on Wednesday he expects Japanese supply of steel products would keep normal despite of coking coal shortage concern due to heavy rain damage on Australian coal chain if the recovery would keep forward without major additional rainfall. He said the market should see the situation for around one month without panic while the raw materials spot market surges temporarily.

Mr. Hayashida sees Japanese steel demand is stable at 80-85% level of recent peak before Lehman shock. He emphasized Asian market is still very strong and will keep strong for the year.

Mr. Hayashida said as president of JFE Steel the firm tries to increase the steel selling price to cover higher raw materials cost when the raw materials cost should increase more in April-June. He also said the firm seeks certain price hike to cover only higher quarterly price, not additional cost for alternative sourcing of coking coal. He indicates the firm would seek higher steel price again in and after April depending on the raw materials situation.

Mr. Hayashida said JFE Steel tries to diversify the coking coal source while the firm heavily depends on cost and quality competitive Australian coal. He said the firm tries to develop new sources in mid-term time frame.