NSSC to Expand Stainless Output Cut

Nippon Steel & Sumikin Stainless Steel (NSSC) announced on Wednesday the firm expands the output cut up to 50% of the capacity at stainless steel making shop in Hikari plant in November. The firm operates the plant at averaged 30% down from the capacity. The firm also expands the output cut up to 50% for nickel series cold rolled sheet at Hikari sheet plant compared with current just more than 30% cut while the firm reduces the output by around 30% at chrome series sheet plant at Kashima.

The firm tries to improve the supply balance and inventory volume through the additional output cut under slower demand. The firm expects stainless demand accelerates to decrease toward second half of fiscal 2008 ending March 2009. The firm decided the additional output cut when the demand could decrease more with potential slower economy.

The firm also reduces the output by 20% for plate and by more than 20% for bar and wire products while the demand level is firmer, especially in offshore market than sheet products. The firm sees the plate demand also slows down for petrochemical projects under lower oil price while the firm operated the plate mill at full capacity in the first half. The firm recognizes the bar and wire demand decreases in wire processing operation in Southeast Asia.

The firm increased the plate export and chrome series cold rolled sheet supply for automobile in the first half while the firm reduced the output for nickel series cold rolled sheet with slower demand. However, the firm reduces the output for all items with uncertainty for worldwide economy.

The firm tries to keep the base selling price by covering the higher cost for output reduction while the firm reflects alloy price changed through the alloy linked price mechanism.