Nippon Steel Aims Global Steel Capacity at 60MT/y and Follows Asian Growth

Mr. Shoji Muneoka, president of Nippon Steel, told the press Nippon Steel accelerates establishment of global steel supply system at 50-60 million tonnes per year mainly in Japan, Asia, America and Atlantic areas in order to realize higher competitiveness for the company’s next growth. He said steel demand in Asia is expected to increase by 60 million tonnes per year and the regional supply and demand balance could gradually tighten when new mills’ opens settle down in South Korea, China and Taiwan. He suggested steel product prices are unlikely to lower since raw material prices stay high.

Mr. Muneoka said Nippon Steel aims crude steel output at average 8 million tonnes per quarter for fiscal 2010 ending in March 2011. He explained the actual production was around 8 million tonnes for October-December. For January-March, the impact of higher yen rate is unforeseeable on domestic steel demand, he said. He referred to the firm’s annual recurring profit forecast at 250 billion yen and said much efforts are needed to achieve the target even in strong yen trend.

Mr. Muneoka explained Nippon Steel has aggressively expanded steel processing and sales net work globally with current crude steel output capacity at 40 million tonnes per year. He said the supply network is organized well especially for automotive steel sheet. He explained the third CGL in BNA, a joint company to manufacture automotive steel sheet with Bao Steel, started operation in China in 2009 while the second CGL in UNIGAL, a joint company with Usiminus of Brazil, will start operation in the first half of 2011. CAPL with Tata Steel in India and CGL with Terunium in Mexico are also ready for construction. Nippon Steel also has I/NTek Kote with Arcelor Mittal. Mr. Muneoka said these steel sheet lines’ capacity will total 6.5 million tonnes per year.

Mr. Muneoka showed an intention to seek new business investment in China and Thailand where car productions are rapidly increasing. He said Chinese annual car production is expected to grow more from present 17 million cars.