Japan Seamless Pipe Supply to Get Tighter

Japanese seamless steel pipe supply is expected to get tighter for April-September with strong export demand for oil well tube and domestic market. The supply is likely to decrease due to regular maintenance by Sumitomo Metal Industries and JFE Steel. Japanese oil well tube export keeps firm mainly for high valued products when oil major companies aggressively expand the resource development under high oil price. Japanese steel makers expect 13% chrome oil well tube demand will be strong in fiscal 2008 staring April when they get more new order as inventory adjustment progresses in Canada. The domestic demand keeps firm for construction and industrial machinery, shipbuilding and plant building. Japanese seamless pipe makers operate the mills at full capacity. Sumitomo Metals plans around 2-week maintenance both at middle- and small-sized seamless mills at Wakayama in April-June. JFE Steel also plans around 2-week maintenance at small-sized seamless mill at Chita plant in April-June and starts expansion work at middle-sized mill in the first half of fiscal 2008. The maintenance and expansion work would reduce the seamless pipe supply temporally both for small- and middle-sized products in the first half year. They are expected to reduce the order receipt. The buyers could have trouble to secure requirement when the domestic supply could short for the strong demand.