JFE Steel Seeks Long Term Growths Through Offshore Production

JFE Steel’s president Hajime Bada said the firm seeks additional steel output capacity in offshore sites while the firm tries to expand the raw steel output capacity to 37 million tonnes including group companies by fiscal 2011. He said the main theme is what applications the firm should focus on through the potential offshore production bases when the world steel demand will keep growing.

Mr. Bada said the firm plans 30.80 million tonnes of raw steel output for the parent firm in fiscal 2008. The firm tries to expand the output to 33 million tonnes level by fiscal 2011 to meet strong demand from the users.

Mr. Bada said the firm now studies longer term strategy mainly for offshore operations including potential integrated steel plant in Brazil, for which the firm is study with Vale and Dongkuk Steel to find the feasibility in a year. He said the firm tries to find the timing to build continuous galvanizing line in Thailand to serve automakers.

Mr. Bada said the firm expects the cost of raw materials, energy and freight increases by around 870 billion yen in fiscal 2008 from fiscal 2007 though the original estimate was around 800 billion yen in April. He said the firm seeks higher price case by case depending on applications, buyers, supply balance and international market level while the firm tries to improve the cost structure.

Mr. Bada said the first priority on raw materials is to secure stably when the firm tries to increase the output of high valued steel products. He said the firm considers joint development of raw materials sources with potential partners at home and abroad while the firm seeks better action by Japanese government to secure resources. He said the firm also tries to improve the technology to use lower grade raw materials.