Kobe Steel’s Raw Steel Output to Rise up to 7.7 million tonnes in F2006

Kobe Steel expects the raw steel output will be 7.6-7.7 million tonnes for fiscal 2006 ending March 2007 when the steel demand will grow for manufacturers including automakers. The output decreased by 150,000 tonnes to 7.56 million tonnes in fiscal 2005 from fiscal 2004 when the firm reduced the output in second half of fiscal 2005 to reduce commodity grade export and domestic sheet steel inventory. The firm keeps cautious for potential downside risk under uncertainty in offshore market. The firm will reduce the output to meet market condition though the firm plans higher output level as fiscal 2004.

The raw steel output increased to 7.71 million tonnes in fiscal 2004 from 7.31 million tonnes in fiscal 2003, 6.83 million tonnes in fiscal 2002 and 6.48 million tonnes in fiscal 2001. The firm, which mainly serves for contract users at home and abroad, increased the output to meet higher demand from automakers and shipbuilders.

The domestic vehicle output increased to 10.9 million units for finished car and 7.7 million units for knockdown sets in fiscal 2005 compared with 10 million units for finished car and 5.3 million units for knockdown sets in fiscal 2000. The domestic shipbuilding volume also increased to 15.7 million gross ton in fiscal 2005 compared with 10 million gross ton in fiscal 2000. Kobe Steel expects the output will increase to 11 million units of finished car and 8 million units of knockdown sets in fiscal 2006. The firm forecasts the shipbuilding volume increases to more than 16.5 million gross ton.

The firm keeps trying to reduce domestic sheet inventory while the firm tries to export mainly for transplants of Japanese manufacturers. However, with the higher activity of domestic manufacturers, the firm’s raw steel output will increase in fiscal 2006 from fiscal 2005.