Nippon Steel’s Vice President Warns Japan Steel Overstock

Nippon Steel’s vice president Kozo Uchida said at press meeting on Tuesday Japanese steel inventory is overstock when the stock at the end of April hit the heist level since adjustment phase after the Lehman Shock. He said steel makers should be cautious about output to reduce the stock while automobile output gets normal level in and after June. He said Japanese steel industry should focus on healthy domestic stock level while the industry should watch offshore market and supply balance carefully.

Mr. Uchida said steel market price in Asia temporarily declined due to export increase from China and South Korea. However, he said the price would increase based on firm actual demand and higher raw materials cost. He said domestic demand increases for automobile and construction including the major earthquake damage restoration.

Ministry of Economy, Trade and Industry’s Iron and Steel Division director Masaki Koito said Japanese major steel makers revised the production plan downward by around 2% compared with the production plan disclosed on May 9. METI heard production plans from major makers, which represent near 90% of production volume, by May 24 again while METI announced the production plan on May 9 based on hearing by April 20. Mr. Koito said the makers revised the production plan apparently due to slower export. He warns Japanese steel makers should focus on domestic inventory adjustment based on current demand condition.