Japan Steels to Supply More Steel for Automakers

Japanese integrated steel makers try to increase the steel supply for automakers. The steel makers are studying potential higher output to keep stable supply when automakers are accepting around 28,000 yen per tonne of price hike for fiscal 2008 started April from previous year. The supply is estimated to increase by around 200,000 tonnes in April-September. Japanese steel makers expected the domestic automobile output is 5.6 million units for first half year of fiscal 2008 and 6.2 million units for second half. The volume is in line with that in fiscal 2007, in which the output was 5.47 million units in first half and 6.32 million units in second half. The output was slow in first half of fiscal 2007 due to Riken Corporation’s outage after major earthquake. However, domestic automakers plan more than 5.8 million units output in first half of fiscal 2008, which is more than 200,000 units higher than expectation by steel makers. The automakers plan higher export to Middle East and Asian countries while the domestic sales are still slow. An integrated steel maker source said the steel makers should increase the supply for automakers in and after June while the supply gap is filled with inventory now. Domestic sheet steel supply is likely to get tighter under strong demand for construction and industrial machinery and export.