JFE Container’s Drum Shipment to Increase from Initial Plan

JFE Container, the largest steel drum maker in Asia, estimates the drum shipment increases for second half of fiscal 2009 ending March compared with an initial plan, in which the volume is 70% of second half of fiscal 2008. The inventory adjustment of chemicals, which represents about 80% of the demand, progressed quickly in May and June.

The range of drop in steel drum shipment of JFE Container was about 35% in April from a year earlier while it was about 28% in May and 21% in June. The shipment in April-June was 72% of April-June 2008 while the firm originally estimated the shipment would be 60% of same period of 2008.

The firm estimates the shipment in July-September is around 80% of same period of 2008. The shipment was the record in July-September 2008 and the shipment of the firm including subsidiaries in Japan and in China was 3.74 million units for first half of 2008. The firm estimates the shipment would decrease slightly for fiscal 2009 from 6.33 million units of fiscal 2008.

JFE Container was forced to reduce the price of steel drum during April-June before steel price reduction when a competitor reduced the price. However, both steel and product price is expected to remain unchanged for a while. The firm does not care about steel price upturn at overseas market when the overseas material rate, which was more than 50% in the peak, is now about 10%.