Japan Electric Furnace Suffered High Scrap Cost for April-September

Japanese major 5 electric furnace steel makers posted higher recurring profit for April-September from same period of 2009, while 5 makers posted lower recurring profit, and 7 makers posted recurring loss. Average purchasing price of ferrous scrap increased by near 10,000 yen per tonne to 30,000 yen for April-September from same period of 2009, while selling price of steel was flat at around 60,000 yen for rebar and around 70,000 yen for H-beam. 17 makers posted higher sales. Their sales volume decreased for rebar and H-beam while increased for angle and channel thanks to firm demand for automobile and construction machine. 10 makers revised down forecasts of sales and profit in the business year ending in March, while 3 makers didn’t change the forecast, and 4 makers didn’t announce the forecast.

The makers supposed ferrous scrap at the last of 30,000 yen or 40,000 yen per tonne, which was the last half of 30,000 yen for April-June, while was below 30,000 yen, and increased to over 30,000 yen from the last half of August. On the other hand, steel makers required substantial time for steel price hike, and couldn’t raise enough.

Four makers increased the profit when the demand recovered for automobile, construction machine or industrial machine. JFE Bards & Shapes Corporation increased the output of special steel bar and wire rod for automobile. Chubu Steel Plate increased the output of steel plate. Tokyo Kotetsu increased billet export.

In the second half of fiscal 2010, car sales dropped by determination of subvention for eco-car. Export negotiation was unsuccessful for construction machine or industrial machine due to higher yen rate.