Japan Major Steels’ Export Rate Drops in F2008

Export sales rate of Nippon Steel, JFE Steel and Kobe Steel decreased in fiscal 2008 from fiscal 2007 while Sumitomo Metal Industries’ export rate was flat. The export value increased due to higher unit price of steel. However, the export slowed down since late 2008 when Japanese steel export including pig iron and ferroalloy is estimated to decrease by 8.8% to 34.9 million tonnes in fiscal 2008 from fiscal 2007.

Nippon Steel’s export decreased by 0.9 percentage points to 32.5% of sales in fiscal 2008 from fiscal 2007. The export rate decreased by 2.3 points to 41.6% for JFE Steel and by 1.7 points to 21.4% for Kobe Steel while the rate was flat at 45.0% for Sumitomo Metals, which kept firm export for seamless pipe and plate.

Japanese export price increased by US$ 400 to FOB US$ 1,000 per tonne for hot rolled coil in the first half of 2008 due to strong demand in developing countries and higher raw materials cost.

However, the export market cooled down after financial crisis in September 2008. Japanese steel makers’ monthly export keeps year to year decrease since October 2008. The export price decreased to less than US$ 400 per tonne for some transactions.

Japanese major steel makers expected the lower export rate at 28% for Nippon Steel, 35% for JFE Steel and 18.6% for Kobe Steel. However, the actual rate was 30.1% for Nippon Steel, 39.7% for JFE Steel and 20.1% for Kobe Steel while Sumitomo Metals’ export rate was 48.0% as expected. They tried to keep export volume under major production cut.

Asian steel market is still in slump. Japanese steel interests expect the high valued steel export market takes more time to recover while some steel using manufacturers’ operation get improving at Asian transplants of Japanese automakers and appliances.