Komatsu Uses More Steel than Expected

Japanese largest construction machinery maker, Komatsu increased the steel purchase to more than 30,000 tonnes per month in April and May at the domestic plants. The volume was averaged less than 20,000 tonnes in fiscal 2009 ended March 2010 compared with more than 50,000 tonnes in the peak in first half of fiscal 2008. The operation and steel consumption increases more than expected when the export is strong for China and mining industry while the firm expected monthly 25,000 tonnes and annual 300,000 tonnes of consumption as of February.

The firm revised the production plan upward by around 10% in April and May. Under the current pace, the production in second half of fiscal 2010 reaches around 80% of the peak.

However, the strong demand is limited in China and BRICs countries and mining industry while the demand was strong for all areas in the peak time in first half of fiscal 2008. The demand is still slow in Japan, USA and Europe and in smaller sized machinery, which is used in civil works in urban areas.

The firm expects Chinese construction machinery demand increases by at least 20% compared with fiscal 2009 level due to strong governmental expenditure. The firm sees the demand shows sign to recover in North America and increases slightly in Japan in fiscal 2010 from fiscal 2009.

The firm expects the operation rate and steel consumption increases at home and abroad from the bottom in fiscal 2009 while the recovery pace is mixed in each area.