Posted on 23 Apr 2009
Nippon Steel to maintain output cuts in April-June
Japan's Nippon Steel Corp, the world's second-biggest steelmaker, said on Wednesday it plans to keep its output cuts intact in April-June as demand remains weak for cars, electronics and machinery.
Crumbling global demand for steel coupled with a stronger yen forced Japan's industry leader Nippon Steel to slash output by 40 percent in the January-March quarter from a year earlier.
A stronger yen hurts exports by making Japanese products less competitive overseas.
"There are some bright spots, particularly in China, but the recovery is still patchy and overall production is not strong," Nippon Steel President Shoji Muneoka told a news conference.
"Production bottomed out in the January-March quarter, but it could take three to five years before steel demand returns (to last year's level)," he said.
Nippon Steel will delay the restart of its Oita plant in southern Japan, initially planned for May 14, at least until the end of June, Muneoka said.
The steelmaker also shut another blast furnace, near Tokyo, earlier this year to cope with the fall in demand.
Muneoka said it could take some time before steel mills and miners agree on iron ore prices for the year to March 2010.
"We see signs of recovery in some products in China, like construction steel and certain types of auto sheet, but the market for products other than these is not that strong," he said.
"China's small mills boosted iron ore imports but will soon stop buying due to high inventory levels. We are worried that they are sending a wrong message of recovery to miners," Muneoka said.
