North-Japan 4 Electric Furnaces to Increase Crude Steel for Apr-Jun

Four electric furnace factories in North Japan plans to increase crude steel output by about 40% for April-June compared with January-March. JFE Bars & Shapes adjusted semi-finished steel inventory during January-March and the other 3 factories expect seasonal demand in spring and export growth. In April, however, the demand recovery is slow. JFE Bars & Shapes decreases the operation rate by 80% in April from a year earlier and the other factories by 20-30%. Crude steel output of these 4 factories is expected to total about 60,000 tonnes in April, a half of the peak in 2008. The demand is unlikely to recover largely even after July. Electric furnaces will continue low output in accordance with the demand.

JFE Bars & Shapes will increase crude steel output by 9,000 tonnes in April from March. Tohoku Steel and Tokyo Tekko will increase crude steel production by 3,000-4,000 tonnes in April from March. Ito Seitetsujo will increase the output by similar level, too.

JFE Bars & Shapes reduced production of special steel bar and wire rod by 70% against the capacity to 27,000 tonnes during January-March to reduce semi-finished steel inventory. Crude steel production was reduced more. The firm plans to keep operation rate of rolling process in April as same as March to continue inventory adjustment. The firm will increase crude steel but the up range is narrower than rolling process.

Automotive component makers seem to continue low operations even after May-June. JFE Bars & Shapes will redress the balance of steel making and rolling until August. Tohoku Steel decreased the output by 35% during January-March from the same period of 2008. The firm plans to decrease the output by 15% to 20,500 tonnes for April-June from the same period of 2008. The firm will keep rebar export and examine billet export. Tokyo Tekko plans to decrease output by 25% to 40,000 tonnes for April-June from the corresponding period of 2008, which decreased the output by 50% during January-March.

Users are holding off rebar procurement with an expectation the price could drop more. Electric furnaces’ order backlogs decreased to about one month from over 2 months. A maker source said the demand stays low in April and seems to maintain inactive after July.