Japan 5 Major Steels to Raise Raw Steel Output by 1.3% in 1H

Japanese 5 major integrated steel makers’ raw steel output is expected to increase by 1.3% or 530,000 tonnes to around 42.4 million tonnes in parent companies base for April-September from same period of 2005. The output increases to meet higher demand for high valued steel products from manufacturers at home and abroad and to increase export after inventory adjustment in Asian countries while Japanese major steels are still cautious for overstock for domestic sheet steel and for offshore market condition. The major steels announced estimates for first half year and full year in fiscal 2006 ending March 2007 last week. The domestic steel demand is firm for building in the first half along with high level activities in manufacturers including automobile, shipbuilding and industrial machinery. The export demand also firm under tight supply of high valued steel products while commodity grade steel supply balance improved in eastern Asia after inventory adjustment. Japanese major steels keep high level raw steel output. Nippon Steel expects the raw steel output is around 15.7 million tonnes for the parent company in the first half. The firm expects the output is flat in the second half while the Nagoya works reduces the output due to blast furnace relining. The firm’s raw steel output is expected to be around 31.4 million tonne for the full year. JFE Steel expects the raw steel output is around 14.2 million tonnes in the first half. The firm recovers the output after the wide output reduction for export in fiscal 2005. The firm plans to increase the output by around 2 million tonnes to 29 million tonne for fiscal 2006 from fiscal 2005. Sumitomo Metal Industries expects the consolidated raw steel output is around 6.7 million tonnes in the first half. The firm is expected to produce 13.4 million tonnes for the full year by keeping the output level in second half. Kobe Steel expects the raw steel output is around 3.83 million tonnes for the parent firm in first half. The firm estimates the raw steel output is around 7.8 million tonnes for the full year when the firm tries to build the inventory of semi-finished steel preparing for blast furnace relining at Kakogawa works. Nisshin Steel expects the raw steel output decreases by 50,000 tonnes to 1.98 million tonnes in first half due to lower operation rate at Kure works caused by water supply accident in Hiroshima. The 5 major steels are expected to increase the raw steel output by 3.8% or 3.17 million tonnes to 85.65 million tonnes in fiscal 2006 from fiscal 2005.