Hiroshima’s Water Supply Trouble may Impact on Construction Sheet Supply

Hiroshima’s water supply trouble, which occurred on Friday due to collapse of water conveying tunnel, could impact on sheet supply for construction market. Nisshin Steel’s Kure works said the water supply was 15% lower than the requirement as of Monday while Yodoko’s Kure plant reported the water supply was 70% for the usual operation on Tuesday. They operate the facilities at lower rate than the capacity. Their sheet supply for construction market will decrease and tighten the supply condition when water tunnel rebuilding is expected to take around 3 weeks. Nisshin Steel’s Kure works produces hot rolled coil and Yodoko makes sheet steel products including colored galvanizing steel. Nisshin Steel ships the hot coil to the downstream operations at Sakai, Toyo and Ichikawa plants for construction application. The lower hot coil output could reduce construction sheet steel output for the firm. The construction sheet steel supply balance is balanced. The market players expect the potential lower supply would not impact on the balanced market. However, the supply balance could tighten before demand usually increases from September. Nisshin Steel said on Tuesday the firm could request for help by other steel makers due to the limited operation at Kure. Yodoko said on Tuesday the shipment is usual from the operation and inventory.