Nippon Steel Keeps Crude Steel Output at 7MT for Oct-Dec

Nippon Steel’s general manager, Junji Uchida, explained Japanese steel demand is recovering only for steel sheet and special steel bar, while keeps low for plate, shaped steel and rebar due to slow building construction and business investment.

He forecasts Japanese common steel output increases by 1.4 million tonnes for domestic automobile and electric appliance industries for July-September from April-June and by 1.5 million tonnes for export. The demand decreased by 40% for domestic market for April-June from the peak level in 2008 and by 30% for export. For July-September, the demand would recover 70% level for domestic market and 90-100% for export, he said.

Mr. Uchida said Chinese steel demand is recovering for infrastructure buildings, automobiles and appliances thanks to governmental economic stimulus measure. China is increasing steel output and import of high grade steel products. South Korean and Taiwanese steel exports are continuing downward from a year earlier. Steel supply and demand is tightening step by step and is expected to keep tight until December.

Mr. Uchida said South Korean and Chinese steel makers are advancing steel plant constructions and expansion plans. Steel supply capacity is expected to increase by 40-50 million tonnes after about 3 years. He apprehends the supply and demand in East Asia would be impacted by these plans in South Korea and China.

Mr. Uchida said iron ore and coal spot price is in upward trend when China is increasing spot purchase volume. Ferrous scrap, copper and aluminum prices are rising. Steel market price is increasing due to rising material price. He said the market price is expected to maintain upward in East Asia. Mr. Uchida expects raw material shortage would hold down expansion of steel output in China because raw material supply can’t increase rapidly.

Mr. Uchida explained Nippon Steel’s steel shipment would increase by 1.9 million tonnes to 6.6 million tonnes following actual demand for July-September but the firm is careful for sheet shipment to domestic market and keeps off increased market sheet inventory. Mr. Uchida forecasts the firm’s export rate increases to 40% from 33% for July-September from April-June. Mr. Uchida explained the firm judged it is rational production that Oita iron works re-starts the operation of no.1 blast furnace and operates 2 blast furnaces. Mr. Uchida said the firm keeps crude steel output at 7 million tonnes for October-December from the same level of July-September when domestic and overseas demands are expected to continue present situation.

Mr. Uchida said the firm hasn’t decided when to restart no.2 blast furnace in Kimitsu iron works when the demand condition is unforeseeable in near future.