Mr. Shoji Muneoka, president of Nippon Steel, met Japan Metal Bulletin at an annual meeting of World Steel Association (WSA) in Paris and explained about Nippon Steel’s next steps to progress merger with Sumitomo Metal Industries successfully for technical innovation and higher cost competitiveness as well as he gave an outlook for global steel market. He showed a concern on unforeseeable and unstable world economy condition and emphasized necessity to keep cautious watch on global steel market.
He told WSA’s functions and rolls seem changing, which was suggested by the first inauguration of Chinese steel maker president as WSA’s chairperson though the post had been taken by American, European and Japanese steel makers so far. He suggested world steel market has drastically changed for a recent few months and steel makers should turn their optimism to cautious observation on the market trend. Mr. Muneoka pointed out economies in advanced counties may deteriorate by American and European financial crisis while strong economic growth in China, India and Brazil may also slow down along governmental inflation control policies. Mr. Muneoka referred to WSA’s latest forecast for world apparent steel consumption. He warned Chinese steel demand growth seems already slowing down while, in Europe, Arcerol Mittal currently suspended blast furnace and Thyssenkrupp announced production cut although WSA this time reviewed its previous demand forecast in April slightly upward with an expectation for continuous steel demand growth in emerging countries. He also pointed out Japanese six-month car production for October 2011-March 2012 might not reach planned 5.6 million sets. Steel makers should vigilantly watch the market, he said. As for impacts of extremely strong yen trend on Japanese exporting enterprises, Mr. Muneoka introduced a case of France. Mr. Muneoka heard from French Industry Minister that France government has set domestic steel industry on strategic position and carried out many active steps to support the industry since 2007. He criticized Japanese government should also take any measures to enhance Japanese enterprises’ competitive power when Japanese companies are concerned to shift their operations to overseas due to extremely strong yen trend, energy problems, globally-highest corporate tax and severe hiring restrictions. Nippon Steel advances technical innovation and raises cost competitiveness to survive in severe market condition. Mr. Muneoka suggested possibility of drastic process change in steel making in future which realizes constant cost shrinkage. As for merger with Sumitomo Industries, Mr. Muneoka said they don’t have intention to close blast furnaces at present while indicated optimization of their 4 plate lines, 6 hot rolling mills and double-digit galvanizing lines as total in Japan. Mr. Muneoka confirmed world steel demand is expected to continue stable growth for a while but he analyzed steel makers currently suffer low margin since they can’t pass raw material cost upsurge on the selling price of steel products enough. Mr. Muneoka said Nippon Steel must win the global race by technical innovation and cost competitive power. He said Nippon Steel’s and Sumitomo Metals’ technologies should be effectively integrated as early as possible. Mr. Muneoka told Nippon Steel aims to follow overseas demand from local customers and Japanese users by provision of same quality services all over the world. He showed an expectation merger of Nippon Steel and Sumitomo Industries enables larger-lot and more global order acceptance by higher productivity and larger operative resources. As for an expansion plan of Usiminas steel plant in Brazil, he gave a view that Usiminas should optimize existing iron works in Brazil for the first time when Brazilian economy is slowing down. He suggested Nippon Steel seeks the most relevant plan along actual economic conditions in the country.