Kobe Steel to Increase High Valued Steel Shipment

Kobe Steel plans to increase the raw steel output by 200,000 tonnes to 4 million tonnes in the second half year to March 2007 from 3.8 million tonnes in the first half. The executive vice president Toshio Kimura, who is head of the iron and steel sector, said the firm tries to increase the supply of high valued steel products for domestic users while the firm will build inventory of semi-finished steel preparing for blast furnace relining at Kobe works. Mr. Kimura expects the domestic averaged steel selling price will increase slightly for the second half from the first half mainly for coated steel and extra charge of special steel bar. He said the firm tries to increase the price for contract users to cover higher raw materials cost while the firm will improve the price system to reflect the value of the high valued products in mid-term. The firm tries to increase the volume weight of only one steel items to 40% in 3 years from 35% in fiscal 2005 ended March 2006 after the firm excluded some products, which were not only one items any more, from only one category though the only one items rate increased to 45% to fiscal 2005. The plan is on line when the rate will increase to 38% in fiscal 2006. Mr. Kimura said the PRO-TEC Coating, which is hot-dip galvanizing joint venture with US Steel, operates at full capacity and ships more than 50% of the production to transplants of Japanese automakers. He said the firm should consider potential solution to meet higher demand from the transplants if the automobile output would increase more.