Japan steel mills see output 28.4 mln T in Jan-Mar

Wed Feb 2, 2011 1:53am EST
* Plan for 2.6 pct bigger output than Oct-Dec
* Exceeds METI estimate by 5.6 pct
* Plans may not fully reflect impact of floods -METI

TOKYO, Feb 2 (Reuters) - Japanese steelmakers' buoyant production may continue into the current quarter on strong demand from Asia, despite supply disruptions of coal from Australia that have forced them to rely on the costlier spot market.
A government poll of about 60 big Japanese steelmakers released on Wednesday showed the companies plan to produce 28.40 million tonnes of crude steel in January-March, up 2.6 percent from the previous quarter.
The figure is 5.6 percent above an estimate by the Ministry of Economy, Trade and Industry revealed last month of 26.88 million tonnes.
A ministry official said the survey on output plans was conducted before the magnitude of the impact of the devastating floods in Australia became clear, and revisions of the plan were possible.

Japanese steelmakers, which rely on Australia for 60 percent of their coking coal needs, have said they have secured enough coal stocks to run until the end of March unless there are further floods or damage to infrastructure in the country.

Japanese companies are boosting coking coal purchases from alternative sources such as the United States, Canada, China and Indonesia, relying on the spot market in some cases.
Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T) kept their 2010/11 production plans unchanged when they announced steep downward revisions in their earnings outlooks last week. (Reporting by Yuko Inoue; Editing by Michael Watson)