Nippon Steel to Follow Increasing Demand for High-Grade Steels

Nippon Steel aims to follow increasing demand for high-grade steel products from manufacturing industries and expand sales of middle- and high-grade steels to gain stable profits in long term, said Shoji Muneoka, vice president of Nippon Steel, to Japan Metal Bulletin. He pointed out that manufacturing industries are in high level operation currently those who demand high-grade steels for their products and that middle- and high-grade steels have less fluctuation of the unit price and the demand volume. Nippon Steel could gain constant profits by increasing the sales ratio of these products. Nippon Steel plans to produce 32 million tonnes of crude steel in fiscal 2008 ending March 2009, the final year of its 3-year management plan, increasing high-grade steels by 3 million tonnes and decreasing common steels by 1 million tonnes from fiscal 2005.Mr. Muneoka said Nippon Steel would reduce steel sheet export for July-September shipping relatively from April-June, though steel market in Eastern Asia rebounded. He explained the firm would not produce surplus products for both domestic and overseas markets to keep and improve the selling price. He also said the firm considers price hike of steel products for automakers, when the iron ore price negotiation concluded between Japanese integrated steel makers and overseas iron ore suppliers and the price increases for fiscal 2006 shipment.Mr. Muneoka took account of steel products supply system in North America where Japanese automakers extend output and sales share recently. He also regarded Southeast Asia as the important business area where steels demand is increasing, especially Thailand as the production center of automobile and home appliances. He said Nippon Steel watches for acquisition issue between Mittal Steel and Arcelor when Nippon Steel is in partnership with both companies and Nippon Steel’s supply strategy for Japanese automakers in North America depends on the outcome of the issue. Mr. Muneoka indicated Nippon Steel might take actions independent of Mittal and Arcelor in North America.He said Nippon Steel is conscious of both quality and volume in steel products supply, while the firm pays more attention to quality. He thinks that some automakers have not succeeded in output volume pursuit and that products competitiveness is the first priority to output scale.

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