Japan Steel Sheet Supply Tightens for Oct-Dec

Japanese steel sheet supply is tightening when export and Japanese automobile output are recovering. The supply is expected to keep tight for October-December. Oita iron works of Nippon Steel completed the construction of no.1 blast furnace. Japanese integrated steel makers will increase their operation rate to 80% compared with the peak level. Their operation may improve more if steel export keeps stable and building construction and machine industries recover for October-December. An integrated steel maker source said users’ orders increased by over 10% for October shipment compared with the average in July-September. Some users and dealers are facing inventory shortage. Some makers don’t accept orders due to short iron source.

Japanese export of hot rolled side strip was 714,000 tonnes in July while cold rolled wide strip was 328,000 tonnes and zinc coated sheet was 332,000 tonnes. These exports increased by double digit in July from June. Compared with a year earlier, hot rolled wide strip export increased by 18.0% and cold rolled wide strip by 17.8%. Exporting rate was near 50% for Nippon Steel and about 60% for JFE Steel, the record high level. Japanese sheet export is expected to increase for October-December from July-September. The users are increasing order volume in China, Brazil and Southeast Asia.

Japanese automakers plan to increase their domestic output by 7% to 2.28 million cars for October-December from July-September, though which is lower by about 20% from the same period of 2007. Domestic automobile sales are increasing thanks to governmental economic stimulus measures. Automakers’ output plans are expected to increase more.

Flat television output increased by 4.2% to 3.206 million sets in July from a year earlier. Some construction machine and machine tool makers are expected to complete inventory adjustment until October and recover the output. An integrated steel maker source said steel frame construction might increase by over 10% for October-December from July-September.

On the other hand, Japanese steel makers apprehend the export when yen exchange rate is rising to 90-91 yen per dollar rapidly. Some makers are building up production capacity in East Asia and China is increasing steel export.