JFE Steel’s West Japan Iron Works Estimates 5% Y/Y Lower Crude Steel Output in F2011

Mr. Hiroshi Oka, head of JFE Steel’s West Japan iron works, indicated at a press meeting in Okayama on Wednesday annual crude steel production at the iron works is estimated to total approximately 19 million tonnes for fiscal 2011 ending in March 2012, 5% lower than in fiscal 2010. He explained export market is weakening due to high yen rate though 60% of the works’ output is for export.

Mr. Oka said the six-month production decreased by 5% year-on-year in the first half of fiscal 2011 mainly due to influences of the Great East Japan Earthquake while the output is unlikely to recover in the last half year since export market is weakened by flood in Thailand and financial crisis in Europe. He explained JFE Steel currently built up domestic crude steel output capacity to 33 million tonnes per year, involving 23 million tonnes in West Japan, but the operation rate is presently around 85% against the capacity.

JFE Steel recently announced the firm reduces crude steel output by about 300,000 tonnes for October-December, 200,000 tonnes of which is involved at West Japan iron works. Mr. Oka said the works will reduce the output mainly in December and maintain the level for January-March 2012. He pointed out production cut might become much further along the export market condition.

West Japan iron works started no.7 continuous casting line in April 2010 in Fukuyama area and successfully reduced the productive cost. Mr. Oka explained the works tries to reduce cost more by utilization of the new casting line and lowering operation of old lines.