Shapes Makers to Keep Production Cut in Osaka

Electric furnace shapes steel makers around Osaka plan to keep major production cut in and after February. They try to seek higher price by adjusting the production level to slow demand. They apparently plan around 20-50% of production cut.

The demand is still slow while the building demand started to recover. The demand is slow for H-beam in civil work application while the shapes demand decreases for shipbuilding and industrial machinery.

However, ferrous scrap cost has increased since October 2010 squeezing profitability of electric furnace shapes makers. The makers try to increase the selling price to improve the profitability while they try to keep supply balance by reducing the output.

Yamato Steel reduced the H-beam output by more than 40% in December and January partly due to planned maintenance. The firm plans around 30% production cut in and after February. Sumikin Steel & Shapes reduced the H-beam output by around 30% in December due to maintenance. The firm plans just more than 20% production cut in and after February. Osaka Steel plans 50% shapes production cut in and after February as cut in December and January.