Ministry of Economy, Trade and Industry’s iron and steel division director Koichi Shioda the rebuilding steel demand increases in fiscal 2012 starting April for damaged areas by the major earthquake in 2011 while the demand is already active for sheet pile and concrete reinforcing steel bar partially. He said METI expects Japanese steel makers contribute to the rebuilding in supply of various steel products and steel related solutions.
The division tries to normalize steel industry’s operation and supply chain after the major earthquake. Mr. Shioda, who assumed the position in July 2011, said the damaged facilities including Sumitomo Metal Industries’ Kashima works and many electric furnace steel plants in northeast Japan resumed the operation to keep the supply chain with minimum supply disruption. He said Japanese steel makers supported recovering steel demand since last summer when automakers and other manufacturers recovered the production. Mr. Shioda said some special steel makers invested to own power generation due to limited availability of power supply after the nuclear power accident amid the major earthquake. He said integrated steel makers contributed to the situation as power suppliers while steel industry adjusted the operation under the necessary power saving. He said METI tries to minimize the power impact on steel industry while Tokyo Electric Power Company announced major price hike. Mr. Shioda said with experience with the major earthquake, manufacturers should study better solutions to keep operation and supply even with such major natural disaster. He indicates production diversification would be effective to keep supply. Mr. Shioda said merger of Nippon Steel and Sumitomo Metals would be model case for better international competitive manufacturer when Japanese manufacturers suffer from higher yen rate and power cost along with severer international competition. He expects Nisshin Steel’s acquisition of Nippon Metal Industry also another case for the better competitiveness and other cases would follow the move. Mr. Shioda said steel makers’ business condition keeps severe due to higher yen rate and severe competition with aggressive Chinese and South Korean rivals along with offshore shift of Japanese steel users and high raw materials cost. He said Japanese steel makers should follow offshore steel demand through each maker’s strategy including potential offshore production and investment in mining interest. He said METI provides support for the offshore projects in financing and in support for technology development.