Nippon Steel Official Warns High Steel Inventory

Nippon Steel’s vice president Kozo Uchida said on Friday to reporters Japanese hot, cold and coated steel inventory was still high at end of June while raw steel output decreased in June, which decreased from a year earlier for 4 months in a row, and the steel order recovered from automakers and other manufacturers. He said the industry should accelerate the inventory adjustment while Japanese carbon steel import hit 6-year high of 420,000 tonnes in June.

Mr. Uchida said Asian economy growth could slow due to anti-inflation actions by China and other emerging countries while world economy is uncertain under financial risk in USA and Europe and accelerated higher yen rate. He said China and South Korea keep record level of steel production and export. He said Japanese steel industry should be cautious on export under the condition including foreign exchange rate and supply balance in each country. He also warns Japanese steel import also impacts on Japanese market when domestic steel price is the highest level in Asia under the yen rate.

Mr. Uchida said Japanese finished car production is around 3.8 million units in April-September and the output could increase from estimated 5.2-5.3 million units in October-March 2012 while the production was very slow after the major earthquake. He said automotive steel supply gets tight in the second half of fiscal 2011 ending March 2012 but the industry can meet the demand as past time. He emphasizes the makers would keep stable supply through closed cooperation with automakers.