JFE Steel Stops Export Offer of Sheet Steel

JFE Steel stops export offer for sheet steel temporally. The firm has no additional capacity to meet the surging export inquiry for April-June shipment when the firm decided to meet firm domestic demand under the limited output capacity during the blast furnace relining. The firm said the attempt to increase the export price by US$ 50-100 per tonne for April-June shipment already succeeded. The firm considers additional export price hike for July-September shipment when the firm resumes the export offers in late April under the favorable market conditions including worldwide tight supply of steel and increasing market price in Asia. JFE Steel started output reduction for commodity grade export in July 2005 reducing the output by 500,000 tonnes for July-September and by more than 500,000 tonnes for October-December. The firm increased the export for January-March after the firms’ customers in Asia reduced the inventory. The firm said the users’ inquiry for export in April-June was 300,000 tonnes more than planed export volume for the period. The firm cannot meet all of the demand, which is same level as in April-June 2005, even if the firm increases export by reducing some shipment for domestic distributors with the limited output capacity when the firm relines no.4 blast furnace at Fukuyama area of West Japan works from February to early May. World steel market is getting tight when Asian steel makers have no additional capacity to export with the recovery of domestic market under inventory adjustment. World steel supply is also shortage under makers’ repairs of mills and steel making facilities and blast furnace trouble in Brazil. Market price of commodity steel in Asia, which was lower than Europe and USA due to the higher inventory, increased to FOB US$ 450-500 per tonne from the bottom of US$ 350 in the end of 2005. JFE Steel’s sheet steel sales unit tries to meet the firm demand from domestic manufacturers as the first priority while the firm keeps the output reduction for domestic distributors to reduce inventory. The firm expects the pending inventory adjustment of domestic sheet steel will decrease to appropriate level in early stage of April-June with the limited supply for domestic market under the surging demand in offshore market.