Japan Steel Demand to Slow Than Expected, Nippon Steel

Nippon Steel revised the domestic steel consumption downward to 78 million tonnes for fiscal 2008 ending March 2009, which is 1.5 million tonnes lower than original outlook in March and flat from fiscal 2007. The firm expects now the building demand is slower with 1 million units of housing start and 60 million square meters of nonresidential building start, which is lower than 1.08 million units and 68 million square meters respectively in original outlook. Nippon Steel expects the domestic demand could be worse for July-September than original outlook, under which Ministry of Economy, Trade and Industry expected to be 30.56 million tonnes of raw steel demand or 650,000 tonnes higher than same period of 2007, due to slower demand for building. Nippon Steel expects the steel demand for manufacturers keeps firm through fiscal 2008. The firm now plans to start works for relining and expansion of no.1 blast furnace at Oita works in March, which was planned in February before, to ship more for manufacturers. The firm tries to maximize the supply for booming industries while the firm reduces the supply for building and slowing industry. Nippon Steel estimates the higher raw steel output in April-June, which was 800,000 tonnes higher than original outlook of 31.06 million tonnes by METI, resulted in higher domestic inventory when the buyers built inventory before price increase.