Japan Major Steels to Cut Sheet Supply

Japanese major steel makers would adjust sheet steel production when sheet steel demand keeps getting lower. Japanese automakers expand the production cut while appliances makers reduce the operation. Sheet processors reduce sheet consumption and the dealers try to reduce the sheet steel inventory when the construction activity slows down.

Japanese automobile production was expected to reach 12.3 million units in fiscal 2008 ending March 2009. However, their production plan revised downward to 11.6 million units in October, to 10.8 million units in early December and to 10.2 million units in mid-December. The production could decrease to less than 10 million units when major automakers expand the production cut additionally. Appliances makers also expand the production cut.

Sheet processors also reduce the operations. Sumitomo Pipe & Tube and Nittetsu Steel Pipe plan to reduce the production by 30-50% in January-March from same period of 2008 reducing the hot rolled coil purchase. Some sheet steel dealers stop new order the makers to reduce the overstock. South Korean buyers also reduce the sheet steel purchase from Japanese makers in and after January.

Japanese major steel makers try to reduce the overstock by reducing the sheet supply. The major 5 makers announced more than 5 million tonnes of production cut in the second half year to March 2009 from the first half. They could expand the production cut additionally.