Nippon Steel Enhances High Valued Steel Tube Supply Globally

Mr. Shinya Higuchi, Nippon Steel’s managing director and head of the steel tube division, explained world steel tube market condition and Nippon Steel’s business strategy for 2011 to Japan Metal Bulletin. He explained U.S. Rig Count recently recovered to around 1,700, 85% of the peak level, while U.S. apparent oil tube consumption represents 90% of the peak level. U.S. oil tube inventory gradually decreases and the inventory ratio is recently 6 months of generally said normal level. Mr. Higuchi said steel tube market could improve more along global recovery in energy industry. As for Japanese market, steel tube demand is unlikely to increase from manufacturing industry while the demand related to construction and civil engineering hit bottom in 2010. He said the demand related to non-residential architectures is also expected to increase in 2011.

Mr. Higuchi explained Nippon Steel raised steel tube export price by around FOB US$ 300 per tonne in 2010 while recognizes necessity for additional hike by the same range in 2011 when iron ore and coal prices are in steep uptrend. He said steel tube market price should surge when steel sheet market price rebounded to near FOB US$ 750 per tonne to reflect the demand growth in Asia. He gave a view Nippon Steel would offer the fair selling price in order to keep stable production even when raw material supply tightens.

Mr. Higuchi said Nittetsu Steel Pipe, the group company, plans to introduce additional productive equipment for automotive steel tube at its subsidiary in China. Another subsidiary in Indonesia projects construction of the second plant to start production of stainless steel pipe for gas exhausting. Siam Nippon Steel Pipe in Thailand decided to establish production and sales network for automobile and motorcycle in India.

Mr. Higuchi explained Chinese steel mills have improved their products’ quality year by year and recently produces high strength steel tube of grade X70 and X80, standards of American Oil Association. Mr. Higuchi said Japanese steel makers should build up technology and enhance high added value steel products such as UO pipe and high corrosion steel tube. He showed an expectation for new business chances for Nippon Steel when steel tube users require higher quality after an oil accident in the Gulf of Mexico.