Japan Major Steels’ Pig Iron Output Tops Raw Steel Production

Japanese integrated steel makers’ pig iron production keeps exceeding raw steel production. They reduce the ferrous scrap consumption at the steel making shops to reduce the output when the demand decreases sharply. That reflects their limit for downside flexibility in the iron making operations. The trend is likely to continue in April-June when they would keep major production cut for the period.

Integrated steel makers’ pig iron production is less than raw steel output due to scrap input at steel making shop. Japanese integrated steel makers’ pig iron production was 87.87 million tonnes in fiscal 2007 ended March 2008 compared with 90.55 million tonnes of raw steel output.

However, Japanese major makers reduce the output since November 2008 when steel demand decreases sharply due to worldwide recession. The major 5 makers’ raw steel production was 5.91 million tonnes while the pig iron production was 6.12 million tonnes in December. The production was 5.5 million tonnes for pig iron and 5.09 million tonnes for raw steel in January. They try to reduce the raw steel production by reducing the scrap input.

They build inventory of pig iron at the works depending on the capacity balance of the facilities while the some pig iron is soled for third party. Some steel works build semi-finished steel inventory when they should reduce the steel shipment for inventory adjustment.