Japan Raw Steel Output Estimated at 104-106MT in F2012, Industry Official

Chairman of Japan Iron and Steel Federation Eiji Hayashida attended a regular press conference held in Tokyo on Friday and gave an outlook that Japanese crude steel production is forecasted at 104-106 million tonnes in fiscal 2012 starting in April. He told the production in fiscal 2011 would decrease by 4% to 106 million tonnes from the previous year.

For fiscal 2012, Mr. Hayashida suggested, crude steel demand is expected to increase by 500,000-600,000 tonnes from construction markets from fiscal 2011 while the demand is expected to decrease by 1 million tonnes from shipbuilding. He indicated inventory adjustment of steel products would also continue and then the total domestic demand might shrink by approximately 2 million tonnes. Mr. Hayashida concluded domestic crude steel production would be around 104 million tonnes if steel export levels off at the level of fiscal 2011 while the production become around 106 million tonnes when Asian steel market improves.

He analyzed Asian steel market seems to hit bottom but the recovery is not strong. Meanwhile, the market price is unlikely to decrease when steel makers have controlled output volumes and steel users have kept procurement at lower level in line with actual demand, he said. As for current yen exchange rate, Mr. Hayashida said the exchange rate seems not to strengthen more than 75 yen per US dollar level while the adequate level should be 90 yen per US dollar or weaker for Japanese enterprises to maintain their international competitiveness. He overviewed Japanese car production is expected to reach 9.3 million units in fiscal 2012 at the recent yen exchange rate.