China’ Overcapacity is Key for the Steel Industry, Mr. Mimura

Chairman Akio Mimura of Japan Iron and Steel Federation said on Thursday the steel industry has concerns including Chinese overcapacity and worldwide consolidation though Japanese steel demand keeps firm mainly for manufacturers. The president of Nippon Steel said in the speech at the New Year ceremony of JISF steel market condition could change depending on the Chinese overcapacity and international consolidation. He said also the offshore steel market could keep firm due to solid economy in USA, Asia, Brazil, Russia, India and China. Mr. Mimura said he expects Chinese government will enforce the steel industrial policy, which China announced in July 2005, to eliminate overcapacity while market mechanism could reshuffle Chinese steel industry. Mr. Mimura said Japanese steel companies have to improve the corporate value against hostile takeover while the past consolidations brought favorable impact on the market including elimination of uneconomical facilities. Mr. Mimura said stock market fails to reflect Japanese high-level technology and better financial position appropriately. He said steel industry has to improve the stable profitability to get confidence from financial market, which sees steel companies have still cyclical market volatility. Mr. Mimura said JISF tackles challenges including orderly international steel trade, global warming, safety and accident prevention and better understanding steel industry in the society. He said JISF started monitoring of steel import since December 2005 to check volume, price and market price against potential unfair steel import.