Sumitomo Metals (Kokura) to Raise Utilization to Meet Recovering Demand

Sumitomo Metals (Kokura) tries to increase the steel making operation at full capacity as early as possible to meet recovering special steel demand for automobile and construction machinery while the operation rate is already more than 90% of the level in first half of fiscal 2008. The production exceeds monthly 110,000 tonnes in and after June while the production is around 300,000 tonnes in April-June. The firm prepares for potential downside risk under uncertainty when yen rate moves higher than other currencies and eco-friendly car purchase incentive will end in September.

The firm’s raw steel output was record 1.44 million tonnes in fiscal 2007 while the annual raw steel output capacity is around 1.5 million tonnes. The output decreased to 210,000 tonnes in April-June 2009 but the output increased to 220,000 tonnes in July-September, 250,000 tonnes in October-December and January-March 2010 when the demand recovered for free cutting steel of automotive engine parts, alloy steel for power train and bearing steel under increasing automobile output.

The firm increases the production of material for crankshaft, which Sumitomo Metal Industries makes at Osaka Steel Works, and plans to produce more than 1.2 million tonnes in fiscal 2010 started April from 930,000 tonnes in fiscal 2009.

The firm launched new refining facilities including RH furnace and LF furnace and continuous caster in December 2009. With the new facilities, the firm improved the production process for each product for better quality and productivity by separating production lines between high performance steel products including free cutting steel with high workability and high clean steel including bearing steel with high fatigue characteristics. The firm adds new dephosphorizing furnace in October 2010 to improve quality, productivity and environmental impact.

The firm’s export rate is around 25%. The firm increases the export of special steel wire rod and bar to offshore transplants of Japanese automakers. The cold heading wire and cold finishing bar making subsidiary, Steel Processing (Thailand) operates at monthly 2,700 tonnes or almost full capacity. Sumitomo Metals (Kokura) eyes expansion at the Thai subsidiary to serve growing local demand when Thai automobile production is record level of annual 1.6 million units.