Nippon Steel Cuts Shapes Production at Kimitsu

Nippon Steel expands supply adjustment for construction steel products under slow demand. The firm expects construction demand slows seasonally along with lower operation days while the demand increases for rebuilding activity in the major earthquake damaged northeastern Japan. The firm reduces operation rate at large shape mil at Kimitsu works, which makes mainly H-beam and commodity grade products, to improve supply balance and operation cost through higher production at other mill.

Japanese construction carbon steel demand is 1.55 million tonnes including 280,000 tonnes of shapes in January, according to outlook by Ministry of Land, Infrastructure, Transport and Tourism. The ministry expects the demand is 1.5 million tonnes including 290,000 tonnes of shapes in February. The demand is apparently 5-6% lower than October-December level when the demand was 4.804 million tonnes including 1.01 million tonnes of shapes in the quarter or averaged monthly 1.6 million tonnes including 330,000 tonnes of shapes.

Domestic dealers’ H-beam inventory held by members of Tokiwa-kai, which is a group of distributors dealing Nippon Steel’s products, increased slightly in December after decreases for 5 months in a row through November. The firm sees the stock is still higher for the demand.

The firm keeps near full capacity operation at large shape mill at Sakai plant, which makes mainly high performance products. The firm tries to serve rebuilding activity in northeastern Japan by shortening lead time.