The major producer expects domestic steel demand in Japan to remain firm, especially in the automotive, construction, civil engineering and industrial machinery sectors. This is expected to be supported by an improving Japanese economy amid better labor market conditions.
Overseas steel demand is also expected to increase at a moderate pace, it said. But it pointed out that there were concerns over protectionist trade policies being applied by the United States and other countries, and that close monitoring of this trend would be needed.
Steel production volumes up
NSSMC produced 46.82 million tonnes of steel in its 2017 financial year, which ended in March this year. This was up from 45.15 million tonnes in the 2016 year.
It produced 23.70 million tonnes of steel in the second half of the 2017 year, from October to March. This was up from 23.12 million tonnes in the first half of the accounting period.
The company’s steel shipment volumes dropped to 37.79 million tonnes in the 2017 financial year, down from 39.78 million tonnes previously.
It exported 19.07 million tonnes in October 2017-March 2018, up from 18.72 million tonnes in April-September.
Market sources said that this was a result of a favorable market for steel products in the domestic Japanese market, which got particular support from strong demand in the building, construction and civil engineering sectors for refurbishment of the Tokyo metropolitan area in time for the 2020 Olympic and Paralympic Games.
The company is improving and reconstructing its steel works to boost production capacities as part of its mid-term management plan.
It announced in early March that it plans to stop running its 2,150 cubic meter No2 blast furnace and a steel mill in the Kokura area around the end of the 2020 financial year.
It has also absorbed Nippon Steel & Sumikin Kotetsu Wakayama Corp, to increase production efficiency. Production will switch to its new 3,700 cubic meter No2 blast furnace after the 2,700 cubic meter No5 blast furnace stops operations by the end of the 2018 financial year.
This will increase crude steel production at the Wakayama Works by 500,000 tonnes per year.
Boosting its global steel supply network
NSSMC has also started initiatives to capture demand in overseas growth markets and to boost its global steel supply network.
It started operations at the Krakatau Nippon Steel Sumikin joint venture in July 2017. The Indonesian operation produces as much as 480,000 tonnes per year of cold-rolled and hot-dipped galvanized steel for automotive production in the Southeast Asian country, where NSSMC expects vehicle demand to grow.
It has also entered into a joint venture with ArcelorMittal to acquire insolvent Indian steelmaker Essar Steel.
The company has also concluded an agreement to acquire Ovako, a Swedish manufacturer of steel for bearings, and has started negotiations to buy Japanese steelmaker Sanyo Special Steel and turn it into a subsidiary.
And it has decided to install a manufacturing facility for ultra-high tensile strength steel sheet at its Kimitsu Works in Japan to produce steel sheets for the automotive industry.
Japan’s Nippon Steel & Sumitomo Metal Corp (NSSMC) expects the global balance of steel demand and supply to remain tight until March 2019, when its current financial year ends, it said on Thursday April 26.