Sumitomo Metals to Increase Rail Wheel Output in Fiscal 2011

Sumitomo Metal Industries expects rail wheel production increases in and after fiscal 2011 starting in April 2011 when rail car order is increasing in USA, which is the firm’s largest export destination of the wheel. The firm expects the wheel production reaches 180,000 units in fiscal 2010, which is slightly higher than the production in fiscal 2009. The firm expects the production would increase in and after fiscal 2011 due to long term contract to German national railway and high speed railway construction in Vietnam while Japanese companies would get order for the high speed railway projects. The firm tries to develop higher valued products with better wear resistant to get more order for high valued products in high speed railway and mining railway applications.The rail wheel demand in North America decreased to 1.2 million units in 2009 from 1.5 million pieces in the peak before economy recession. However, the order for rail car is increasing in 2010 when the rail transport volume recovers.

Sumitomo Metals signed long term contract with German national railway to supply 7,000 units of wheel in 2009-2011. Sumitomo Metals expects the firm can get such order for high quality wheel in and after 2012. With the high reputation, the firm receives inquiries from other railway companies in Europe and ships the products for the users’ test. The firm expects the export, which already represents half of the total shipment, will increase from 90,000 units in fiscal 2010 thanks to higher demand from Europe.

The firm increased the wheel making capacity by 20% to 240,000 pieces per year at Osaka steel works in 2008. The firm is sole supplier of rail wheel for domestic railway operators including Japan Railway group. The firm also provides all of rail for Taiwanese high speed rail, of which Japanese companies got order for the project. The firm provides assistance to Japanese companies to get order for high speed railway projects in USA, Brazil, Vietnam and India. The firm conducts joint development with offshore rail operators to get more order of high valued wheel for high speed railway and mining rail transportation applications.