Japan Steel Makers to Cover Damaged Bar, Wire Rod Plants

Japanese integrated steel makers and special steel makers will make new production plan for special steel bar and wire rod in next week to cover production loss for damaged plant in eastern Japan due to the major earthquake. Nippon Steel and JFE Bars & Shapes study options to ask alternative production to other plants and other makers when the quake damaged operations of Nippon Steel’s Kamaishi plant and JFE Bars & Shapes’ Sendai plant. Nippon Steel and JFE Bars & Shapes try to make balanced production plans when automakers’ production level would slow due to the quake damage and limited power availability from Tokyo Electric Power Company (TEPCO). Kobe Steel is willing to support the production. Japanese steel industry would get through the severe situation by cooperation each other as aftermath of major quake at Hanshin area 16 years ago.

Nippon Steel’s Kamaishi plant, which produced monthly around 60,000 tonnes of products including steel tire cord and wire rod for cold heading wire, has no timeframe to restart the operation. Nippon Steel makes alternative optimum production system in the group including Muroran works and Kimitsu works for special steel wire rod and NS Bar & Wire and Godo Steel for carbon steel wire rod. Nippon Steel asked Kobe Steel to support for steel products supply including flat steel products and the detailed plan is to be made. Sumitomo Metals (Kokura), which operates at full capacity now, couldn’t support Nippon Steel’s production.

JFE Bar & Shapes’ Sendai plant, which produced around monthly 70,000 tonnes of special steel bar and wire rod, asked JFE Steel to support the production. JFE Steel started to ask other makers for cooperation when JFE Steel cannot produce some of the needed products at Kurashiki area of West Japan works.

Nippon Steel and JFE Bars & Shapes have to get approve from the customers for the alternative production. The steel makers start the alternative production from easier part by allocating some production for each customer to other makers with the products shipment for same customers.

Some automakers already asked special steel makers to ship alternative materials. Some automakers and automotive parts makers need the products when some users have limited materials inventory due to direct shipment from JFE Bars & Shapes usually while many automotive plants stop the operation now.

Limited power supply is another hurdle to keep manufacturing operations. Japanese automakers have to suspend the operation more than blackout time when the makers have to prepare for lines before and after the blackout. The unstable power supply with every day revised schedule would reduce automakers’ operation rate. Under the uncertain steel demand condition, a source of steel maker with request from Nippon Steel and JFE Bars & Shapes said the supply could be more than the demand if the plan is based on actual demand.