Wed Jan 25, 2012
TOKYO Jan 25 (Reuters) - Crude steel output in Japan is set to fall slightly in 2012 from the year before due to weak domestic demand and exports, an industry body said on Wednesday.
Eiji Hayashida, chairman of the Iron and Steel Industry Federation, said production would drop by around 2-3 million tonnes from 107.6 million tonnes in 2011.
Hayashida, also head of JFE Holdings, added that Tokyo Electric Power Co's plan to increase rates for corporate customers would be hard for steel makers to stand.
The utility, known as Tepco, is struggling in the aftermath of the disaster at its Fukushima Daiichi nuclear plant.
(sourced Reuters)
Showing posts with label JFE Holdings Inc. Show all posts
Showing posts with label JFE Holdings Inc. Show all posts
Wednesday, January 25, 2012
Tuesday, November 15, 2011
JFE looking at increasing stake in JSW Steel
Tuesday, 15 Nov 2011
Japan’s JFE Holdings Inc is eyeing a larger chunk of JSW Steel Ltd, India’s third biggest steel maker hoping to take advantage of a steep fall in the share price and recently eased takeover norms.
According to Bombay Stock Exchange data, JFE had a 14.78% stake in JSW on September 30th
Mr Hironobu Fukushima head of corporate communications at JFE Steel Corp said that “We expect to start talking soon with JSW Steel.” But declined to elaborate.
JFE acquired a 14.99% stake in JSW in July 2010 in return for certain technology and technical assistance for automotive steel production. JSW issued 32 million shares at INR 1,500 apiece.
JFE’s Fukushima said under Japanese law, if a company acquires more than 20% of the voting rights in another company, the latter becomes an equity method affiliate of the buyer. If the second firm is an important equity method affiliate of the first, its performance must be included in the latter’s financial statements. The level of importance is decided by the acquiring company.
, he said.
This implies that if JFE considers JSW an important affiliate, it will vie for a 20-24% stake in the Indian firm, just short of the 25% open offer trigger that requires the buyer to offer to purchase more shares from the public. The previous trigger was 15%. India’s new takeover code took effect on 22 October.
(sourced:livemint)
Japan’s JFE Holdings Inc is eyeing a larger chunk of JSW Steel Ltd, India’s third biggest steel maker hoping to take advantage of a steep fall in the share price and recently eased takeover norms.
According to Bombay Stock Exchange data, JFE had a 14.78% stake in JSW on September 30th
Mr Hironobu Fukushima head of corporate communications at JFE Steel Corp said that “We expect to start talking soon with JSW Steel.” But declined to elaborate.
JFE acquired a 14.99% stake in JSW in July 2010 in return for certain technology and technical assistance for automotive steel production. JSW issued 32 million shares at INR 1,500 apiece.
JFE’s Fukushima said under Japanese law, if a company acquires more than 20% of the voting rights in another company, the latter becomes an equity method affiliate of the buyer. If the second firm is an important equity method affiliate of the first, its performance must be included in the latter’s financial statements. The level of importance is decided by the acquiring company.
, he said.
This implies that if JFE considers JSW an important affiliate, it will vie for a 20-24% stake in the Indian firm, just short of the 25% open offer trigger that requires the buyer to offer to purchase more shares from the public. The previous trigger was 15%. India’s new takeover code took effect on 22 October.
(sourced:livemint)
Friday, March 18, 2011
Japan Feb crude steel output +5.7 pct yr/yr,March fall seen
Fri Mar 18, 2011 5:42am GMT
* February output up 5.7 pct yr/yr
* Output down 7.5 pct from Jan, when Sumitomo came back
* Analysts expect further output fall in March
TOKYO, March 18 (Reuters) - Japan's crude steel output rose 5.7 percent in February from a year earlier to 8.93 million tonnes, the Japan Iron and Steel Federation said on Friday.
Output, which is not seasonally-adjusted, declined 7.5 percent from January.
January's strong month-to-month output increase was due to a production boost by Sumitomo Metal Industries Ltd, Japan's No.3 steel mill, whose production was affected by troubles at its blast furnace in November and December.
Analysts expect Japan's crude steel output for March to drop further following the disruption to operations after the disastrous earthquake that hit eastern Japan on March 11.
Japan's big two Nippon Steel Corp and JFE Holdings Inc have resumed operations of blast furnaces idled after the quake since Sunday, but government-imposed power cuts are expected to sharply reduce their production in March.(Reporting by Yuko Inoue; Editing by Ed Lane,sourced Reuters)
* Output down 7.5 pct from Jan, when Sumitomo came back
* Analysts expect further output fall in March
TOKYO, March 18 (Reuters) - Japan's crude steel output rose 5.7 percent in February from a year earlier to 8.93 million tonnes, the Japan Iron and Steel Federation said on Friday.
Output, which is not seasonally-adjusted, declined 7.5 percent from January.
January's strong month-to-month output increase was due to a production boost by Sumitomo Metal Industries Ltd, Japan's No.3 steel mill, whose production was affected by troubles at its blast furnace in November and December.
Analysts expect Japan's crude steel output for March to drop further following the disruption to operations after the disastrous earthquake that hit eastern Japan on March 11.
Japan's big two Nippon Steel Corp and JFE Holdings Inc have resumed operations of blast furnaces idled after the quake since Sunday, but government-imposed power cuts are expected to sharply reduce their production in March.(Reporting by Yuko Inoue; Editing by Ed Lane,sourced Reuters)
Saturday, March 12, 2011
Japan Quake's Effects To Hit Iron-Ore Market - Steel Index
MAR11,2011,10:26 A.M. ET
By Diana Kinch, Dow Jones Newswires
"However, this will affect sentiment" in the iron-ore market, Hard said.
Tags :Sumitomo Metal Indutries Ltd., Vale, Tokyo Bay,
By Diana Kinch, Dow Jones Newswires
RIO DE JANEIRO (Dow Jones)--Friday's earthquake in Japan will affect the global seaborne iron-ore market as at least five major steel mills are halting production and may be out of action for as long as six months, London-based price provider Steel Index said.
The five mills--Nippon Steel Corp.'s (5401.TO) Muroran and Kimitsu works, JFE Holdings Inc.'s (5411.TO) Chiba and Keihin plants and Sumitomo Metal Industries Ltd.'s (5405.TO) Kashima works in Tokyo Bay--have sustained structural damage and their port facilities are inoperable, Tim Hard, Steel Index director, told Dow Jones Newswires, citing sources in Shanghai.
Assuming the mills are closed for six months, 22.2 million metric tons of iron-ore demand could be removed from the seaborne iron-ore market, Hard said. The mills are supplied by Brazilian miner Vale SA (VALE, VALE5.BR) on contract and they also buy ore from Australian suppliers on the spot market, he said.
The steel mills have been affected by the tsunami which hit Tokyo Bay following the magnitude 8.9 earthquake which hit northern Japan earlier Friday, according to Steel Index. Kobe Steel Ltd.'s (5406.TO) Kakogawa steel mill in western Japan may also have been affected, Hard said.
"Tokyo Bay is a steelmaking center. There are various integrated steel mills there," Hard said. "There are also a host of mini-mills and dock-side scrap-storage facilities nearby which will have been affected, not to mention the port and sea-bordering infrastructure."
The problems shouldn't have any major direct impact on iron-ore prices, as lost shipments of the steelmaking raw material to the mills affected will represent only a small tonnage compared with global seaborne iron-ore which amounts to some one billion tons annually, the Steel Index director said.
The five mills--Nippon Steel Corp.'s (5401.TO) Muroran and Kimitsu works, JFE Holdings Inc.'s (5411.TO) Chiba and Keihin plants and Sumitomo Metal Industries Ltd.'s (5405.TO) Kashima works in Tokyo Bay--have sustained structural damage and their port facilities are inoperable, Tim Hard, Steel Index director, told Dow Jones Newswires, citing sources in Shanghai.
Assuming the mills are closed for six months, 22.2 million metric tons of iron-ore demand could be removed from the seaborne iron-ore market, Hard said. The mills are supplied by Brazilian miner Vale SA (VALE, VALE5.BR) on contract and they also buy ore from Australian suppliers on the spot market, he said.
The steel mills have been affected by the tsunami which hit Tokyo Bay following the magnitude 8.9 earthquake which hit northern Japan earlier Friday, according to Steel Index. Kobe Steel Ltd.'s (5406.TO) Kakogawa steel mill in western Japan may also have been affected, Hard said.
"Tokyo Bay is a steelmaking center. There are various integrated steel mills there," Hard said. "There are also a host of mini-mills and dock-side scrap-storage facilities nearby which will have been affected, not to mention the port and sea-bordering infrastructure."
The problems shouldn't have any major direct impact on iron-ore prices, as lost shipments of the steelmaking raw material to the mills affected will represent only a small tonnage compared with global seaborne iron-ore which amounts to some one billion tons annually, the Steel Index director said.
"However, this will affect sentiment" in the iron-ore market, Hard said.
Tags :Sumitomo Metal Indutries Ltd., Vale, Tokyo Bay,
Friday, March 11, 2011
UPDATE - Japan quake sparks economy fear, budget plan mooted, BOJ offers help
Fri Mar 11, 2011 11:54am GMT
* Auto and electronics plants, refineries shut after massive quake
* Disaster fresh blow to struggling economy; ports, airports shut
* Leaders urge government to compile extra budget,
BOJ pledges support
* Yen, stocks fall, bonds jump on economic fallout concerns
(Recasts with push for emergency budget, analyst quotes)
By Osamu Tsukimori and Stanley White
TOKYO, March 11 (Reuters) - Auto plants, electronics factories and refineries shut across large parts of Japan on Friday after a powerful earthquake rocked the country, triggering a tsunami, buckling roads and knocking out power to millions of homes and businesses.
Leaders of the ruling and opposition parties pushed for an emergency budget to help fund relief efforts after Prime Minister Naoto Kan asked them to "save the country", Kyodo news agency.
The Bank of Japan, which has been struggling to boost the anaemic economy, said it would do its utmost to ensure financial market stability as air force jets roared toward the northeast coast to assess the damage from the biggest quake to hit the country in 140 years.
The 8.9 magnitude quake sent shares skidding in Japan and elsewhere, adding to a slide in global stocks to their lowest level in nearly six weeks.
Several airports, including Tokyo's Narita, were closed and rail services halted. All of the country's ports were closed.
Electronics giant Sony Corp , one of the country's biggest exporters, shut six factories, Kyodo news agency reported.
"There are car and semiconductor factories in northern Japan, so there will be some economic impact due to damage to factories," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.
At least 44 people were killed, Kyodo said, and many were injured in the quake, with fires breaking out from Sendai city in northern Japan to Tokyo. A tsunami 10 metres high hit Sendai port in Miyagi Prefecture, about 300 km (180 miles) northeast of Tokyo, but there were no immediate reports of damage.
Miyagi and its surrounding areas include major manufacturing and industrial zones, with many chemical and electronics plants. But early reports from the area were sketchy and it was not clear if some plants were shut simply due to a lack of power or because of quake damage.
Miyagi, the area most affected by the quake, accounts for 1.7 percent of Japan's gross domestic product (GDP), Macquarie Research said.
"There are two basic economics-related concerns. The first is that the fragile economic cycle is not in a position to withstand significant disruption," Macquarie said in a note.
"The second is that the combination of a softer economy and the additional strain on public finances will put upward pressure on bond yields."
Toyota Motor Corp said it had halted production at a parts factory and two assembly plants in the area, while Nissan Motor Co , the country's second-largest automaker, stopped operations at four factories, media reported.
Two people were reported killed by a collapsing ceiling at a Honda Motor Co factory in Tochigi Prefecture, north of Tokyo, but no other details were immediately available.
QUAKE ADDS TO MARKET WORRIES
The quake occurred as the world's third-largest economy was showing signs of reviving after shrinking in the final quarter of last year. The disaster raised the prospect of major disruptions for many key businesses, at least in the short term.
The yen fell as much as 0.3 percent against the dollar before recouping its losses, while Nikkei stock futures plunged nearly 5 percent at one point.
The disaster also weighed on markets elsewhere, pushing shares in European insurance companies down. Large reinsurers -- Swiss Re , Hannover Re and Munich Re -- were all down more than 4 percent.
World stocks measured by the MSCI dropped 0.4 percent to their lowest level since the end of January.
The quake hit just before the Tokyo stock market closed, so prices didn't fully factor in the scale of the disaster.
"Stocks will probably fall on Monday, especially of those companies that have factories in the affected areas, but on the whole the selloff will likely be short-lived," said Mitsuhsige Akino, a fund manager at Ichiyoshi Investment Management.
Bond futures surged on worries the widespread damage would put further pressure on the economy, while the most active gold contract on the Tokyo Commodity Exchange, February 2012 , inched higher.
"We still don't know the full scale of the damage, but considering what happened after the earthquake in Kobe, this will certainly lead the government to compile an emergency budget. We can expect consumption to fall. This could temporarily pull down gross domestic product," Yamamoto said.
With Japanese interest rates already near zero, analysts said the central bank and the government had few options but to inject more money into the economy, even if it risked swelling the already bloated deficit.
"The extent of the damage is hard to tell but it seems devastating for the northern Japan economy. The government must act quickly to announce support packages and the central bank should pump more money into the economy," said Tsutomu Yamada, a market analysts at Kabu.com Securities.
The 1995 quake that devastated Kobe caused $100 billion in damage, though industrial production and financial markets bounced back fairly quickly.
"The government would have to sell more bonds, but this is an emergency, so this can't be avoided," Yamamoto said.
"Given where the Bank of Japan's benchmark interest rate is now, they can't really lower rates. The BOJ will focus on providing liquidity, possibly by expanding market operations."
POWER PLANTS, REFINERIES SHUT
Hokuriku Electric Co said all of three reactors at its Onagawa nuclear plant Japan shut down automatically after the quake, but no radioactive leaks were reported.
Electric Power Development (J-Power) also halted operations of its Isogo thermal power plant in Yokohama, Jiji reported.
Television reported a major fire at Cosmo Oil Co's Chiba refinery, east of Tokyo. JX Nippon Oil & Energy Corp, Japan's top refiner, halted operations at three refineries in Sendai, Kashima and Negishi, while Tonengeneral shut the main units at its Kawasaki refinery, media said.
Japanese media also reported a fire at JFE Holdings Inc's steel plant in Chiba. JFE, the world's fifth-largest steelmaker, said there was no major impact.
Primearth EV Energy Co Ltd, a joint venture between Panasonic Corp and Toyota making batteries for environmentally friendly vehicles, said its Miyagi battery factory had halted production because of power cuts. The extent of any damage was not clear, but a spokesman said it did not appear to be major.
Mitsui Mining and Mitsubishi Material halted operations at zinc and copper smelters in the region. (Additional reporting by TOKYO bureau; Writing by Kim Coghill; Editing by Tomasz Janowski and Neil Fullick,sourced:Thomson Reuters)
Leaders of the ruling and opposition parties pushed for an emergency budget to help fund relief efforts after Prime Minister Naoto Kan asked them to "save the country", Kyodo news agency.
The Bank of Japan, which has been struggling to boost the anaemic economy, said it would do its utmost to ensure financial market stability as air force jets roared toward the northeast coast to assess the damage from the biggest quake to hit the country in 140 years.
The 8.9 magnitude quake sent shares skidding in Japan and elsewhere, adding to a slide in global stocks to their lowest level in nearly six weeks.
Several airports, including Tokyo's Narita, were closed and rail services halted. All of the country's ports were closed.
Electronics giant Sony Corp , one of the country's biggest exporters, shut six factories, Kyodo news agency reported.
"There are car and semiconductor factories in northern Japan, so there will be some economic impact due to damage to factories," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.
At least 44 people were killed, Kyodo said, and many were injured in the quake, with fires breaking out from Sendai city in northern Japan to Tokyo. A tsunami 10 metres high hit Sendai port in Miyagi Prefecture, about 300 km (180 miles) northeast of Tokyo, but there were no immediate reports of damage.
Miyagi and its surrounding areas include major manufacturing and industrial zones, with many chemical and electronics plants. But early reports from the area were sketchy and it was not clear if some plants were shut simply due to a lack of power or because of quake damage.
Miyagi, the area most affected by the quake, accounts for 1.7 percent of Japan's gross domestic product (GDP), Macquarie Research said.
"There are two basic economics-related concerns. The first is that the fragile economic cycle is not in a position to withstand significant disruption," Macquarie said in a note.
"The second is that the combination of a softer economy and the additional strain on public finances will put upward pressure on bond yields."
Toyota Motor Corp said it had halted production at a parts factory and two assembly plants in the area, while Nissan Motor Co , the country's second-largest automaker, stopped operations at four factories, media reported.
Two people were reported killed by a collapsing ceiling at a Honda Motor Co factory in Tochigi Prefecture, north of Tokyo, but no other details were immediately available.
QUAKE ADDS TO MARKET WORRIES
The quake occurred as the world's third-largest economy was showing signs of reviving after shrinking in the final quarter of last year. The disaster raised the prospect of major disruptions for many key businesses, at least in the short term.
The yen fell as much as 0.3 percent against the dollar before recouping its losses, while Nikkei stock futures plunged nearly 5 percent at one point.
The disaster also weighed on markets elsewhere, pushing shares in European insurance companies down. Large reinsurers -- Swiss Re , Hannover Re and Munich Re -- were all down more than 4 percent.
World stocks measured by the MSCI dropped 0.4 percent to their lowest level since the end of January.
The quake hit just before the Tokyo stock market closed, so prices didn't fully factor in the scale of the disaster.
"Stocks will probably fall on Monday, especially of those companies that have factories in the affected areas, but on the whole the selloff will likely be short-lived," said Mitsuhsige Akino, a fund manager at Ichiyoshi Investment Management.
Bond futures surged on worries the widespread damage would put further pressure on the economy, while the most active gold contract on the Tokyo Commodity Exchange, February 2012 , inched higher.
"We still don't know the full scale of the damage, but considering what happened after the earthquake in Kobe, this will certainly lead the government to compile an emergency budget. We can expect consumption to fall. This could temporarily pull down gross domestic product," Yamamoto said.
With Japanese interest rates already near zero, analysts said the central bank and the government had few options but to inject more money into the economy, even if it risked swelling the already bloated deficit.
"The extent of the damage is hard to tell but it seems devastating for the northern Japan economy. The government must act quickly to announce support packages and the central bank should pump more money into the economy," said Tsutomu Yamada, a market analysts at Kabu.com Securities.
The 1995 quake that devastated Kobe caused $100 billion in damage, though industrial production and financial markets bounced back fairly quickly.
"The government would have to sell more bonds, but this is an emergency, so this can't be avoided," Yamamoto said.
"Given where the Bank of Japan's benchmark interest rate is now, they can't really lower rates. The BOJ will focus on providing liquidity, possibly by expanding market operations."
POWER PLANTS, REFINERIES SHUT
Hokuriku Electric Co said all of three reactors at its Onagawa nuclear plant Japan shut down automatically after the quake, but no radioactive leaks were reported.
Electric Power Development (J-Power) also halted operations of its Isogo thermal power plant in Yokohama, Jiji reported.
Television reported a major fire at Cosmo Oil Co's Chiba refinery, east of Tokyo. JX Nippon Oil & Energy Corp, Japan's top refiner, halted operations at three refineries in Sendai, Kashima and Negishi, while Tonengeneral shut the main units at its Kawasaki refinery, media said.
Japanese media also reported a fire at JFE Holdings Inc's steel plant in Chiba. JFE, the world's fifth-largest steelmaker, said there was no major impact.
Primearth EV Energy Co Ltd, a joint venture between Panasonic Corp and Toyota making batteries for environmentally friendly vehicles, said its Miyagi battery factory had halted production because of power cuts. The extent of any damage was not clear, but a spokesman said it did not appear to be major.
Mitsui Mining and Mitsubishi Material halted operations at zinc and copper smelters in the region. (Additional reporting by TOKYO bureau; Writing by Kim Coghill; Editing by Tomasz Janowski and Neil Fullick,sourced:Thomson Reuters)
Thursday, February 3, 2011
Nippon, Sumitomo Metal merging to create No.2 steelmaker
Thu Feb 3, 2011 10:35am GMT* Merged company would trail only ArcelorMittal in global steel output
* Nippon Steel, Sumitomo Metal aim to merge in Oct 2012
* Japan steelmakers face stiff competition from Asian rivals
* Merged company would have unmatched product lineup - analysts
By Junko Fujita
TOKYO, Feb 3 (Reuters) - Japan's Nippon Steel Corp and Sumitomo Metal Industries plan to merge to create the world's second-largest steelmaker in an effort to fend off tough competition from Asian rivals and offset shrinking demand from domestic automakers.
The deal, which would likely see Japan's top steelmaker Nippon Steel acquiring Sumitomo Metal, comes as the industry grapples with surging raw materials prices, exacerbated recently by floods in Australia.
Japanese steelmakers have been particularly hard hit as domestic automakers such as Toyota Motor Corp and Nissan Motor Co build fewer cars at home and expand in emerging markets such as India using products from local steelmakers.
They also face cut-throat competition from South Korea's POSCO and Baoshan Iron & Steel Co , China's biggest listed steelmaker, as Japanese automakers seek lower prices to weather an unfavorably strong yen.
Analysts, as well as Japanese government officials and politicians, welcomed the plans for the merger, which is subject to approval from Japan's Fair Trade Commission (FTC).
"The new group has a chance to become very competitive in Asia," said CLSA analyst Jeremie Capron, adding there was room for Sumitomo Metal to cut costs with the help of Nippon Steel.
"The merged company will have the best product line-up in the industry ranging from construction steel, auto steel sheets, thick plates to seamless pipes. That's quite unique, and the No.1 company, ArcelorMittal , does not have such a product line-up."
Nippon Steel, whose main customers include Japanese automakers, and Sumitomo Metal Industries, which is strong in seamless pipes used in the energy, construction and machinery sectors, said they aimed to merge in October 2012.
Nippon Steel and Japan's No.2 JFE Holdings last week cuts their outlooks for the year to March, citing rising costs of coking coal and iron ore.
"INDUSTRY GOLIATHS"
Nippon Steel executives had said the company was looking to deepen cooperation with Sumitomo Metal and Kobe Steel Ltd , with which it has some operational partnerships, but had cited objection from the FTC for its inability to do so.
The merged company would rank No.2 in the world, with a combined crude steel output of 47.8 million tonnes last year, Sumitomo Metal Industries President Hiroshi Tomono said at a news conference in Tokyo. It will employ more than 75,000 people.
That would still be about half the production of top-ranked ArcelorMittal but place the group ahead of Baosteel. Based on 2009 crude steel production, Nippon Steel ranked fourth in the world and Sumitomo Metal placed 19th, according to the World Steel Association.
"These are two industry goliaths. The merger of these two titans of industry looks designed to exceed anything the Chinese can do," said John Meyer, a London-based analyst at investment bank Fairfax.
"The integration...combines the production and technical skills of both companies to produce better-quality products more efficiently and more effectively. Other steel producers will struggle to compete with the new efficiencies of scale and services being offered by the joining of these titans," he added.
Nippon Steel, with a market capitalisation $24 billion, and Sumitomo Metal, valued at $11 billion, already hold minority stakes in each other.
They have not yet decided the merger ratio.
Nippon Steel President Shoji Muneoka told a news conference that he expected the FTC to approve the merger, given that the two firms have different product strengths.
Muneoka also said the relationship with Kobe Steel, in which Nippon Steel holds a stake of 3.4 percent, would be maintained.
Rival JFE said it supported the merger and Japanese Trade Minister Banri Kaieda said it had his blessing.
"The merger aims to strengthen global competitiveness through reorganisations of operations as global competition heats up in the steel industry," he said.
"I value such a move highly because it is line with our 'new growth strategy' aimed at realising a strong economy."
JFE unit JFE Steel was the last major merger in the Japanese steel industry, when Kawasaki Steel and NKK combined in 2002 to form what is now the world's fifth biggest steelmaker. (Additional reporting by Chang-Ran Kim, Yuko Inoue, Chikako Mogi, Nathan Layne in TOKYO, Nick Trevethan in SINGAPORE, Ploy Ten Kate in BANGKOK; Editing by Edwina Gibbs and Lincoln Feast)
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)
* 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)
Friday, January 28, 2011
Nippon Steel, JFE Cut Profit Forecasts on Coal Cost
Friday - Jan 28, 2011
By Masumi Suga and Yasumasa Song, Reuters
Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.
Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.
JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.
Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.
While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.
China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.
Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.
Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)
By Masumi Suga and Yasumasa Song, Reuters
Nippon Steel Corp. and JFE Holdings Inc., Japan’s two largest mills, cut their full-year profit forecasts after prices fell and record rains and floods in Australia pushed up the cost of steelmaking coal.
Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.
Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.
JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.
Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.
While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.
China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.
Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.
Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)
Wednesday, January 12, 2011
BHP Coal Contract Change Spares Consumers Price Surge
BHP Billiton Ltd.’s push to set coal prices quarterly rather than annually may spare steelmakers from a surge in costs after flooding in Australia disrupted mine production in Queensland state.
“The market can respond far quicker than with the 12-month pricing and buyers will be prepared for an increase knowing they can always renegotiate the next contract,” said Gavin Wendt, a senior resource analyst at MineLife Pty in Sydney. “It’s a more fluid market. You probably won’t see the sorts of huge price movements that we saw a couple of years ago.”Steelmakers were hit with a threefold increase in annual contract prices to about $300 a metric ton in 2008 after heavy rains and floods affected mining in Queensland. This year, coal production and deliveries have been disrupted after Australia had its wettest September-to-November spring on record. BHP, the world’s biggest mining company, has urged the industry to move to short-term deals to make prices more responsive to market changes. It agreed with Japan’s JFE Holdings Inc. to the first three-month coking coal contract in March.Coking coal and iron-ore suppliers traditionally held annual talks with steelmakers to fix benchmark contracts for the 12 months from April 1, the start of the Japanese financial year. Quarterly accords mean producers can spread price increases caused by the rain over the course of the year.“Producers are not compelled to push for higher prices now to offset lost production, like they have in recent years, most notably the super-spike of $300 a ton,” UBS AG analysts led-by Sydney-based Tom Price said in an e-mailed note today. “They don’t have to wait another-12-months like they used to.”
Force Majeure
Production has been disrupted at mines operated by Macarthur Coal Ltd., Aquila Resources Ltd., Vale SA and Xstrata Plc. They have all declared force majeure, a legal clause invoked by companies when they can’t meet obligations because of circumstances beyond their control.“We’ve moved now to quarterly pricing, in the old days we had annual pricing,” Keith De Lacy, chairman of Macarthur Coal Ltd., the world’s largest producer of pulverized coal used in steel manufacturing, said on Bloomberg Television on Dec. 8. “The market responds a lot quicker to supply and demand.”BHP agreed with Japanese steelmakers to cut coking-coal prices by 7 percent in the three months ending Dec. 31. Kobe Steel Ltd. will pay $209 a metric ton, from $225 a ton in the quarter from July to September, Hiroyuki Hashimoto, a spokesman for Kobe Steel, said Sept. 1. JFE Holdings’ steel unit reached the same agreement, the company said.
Fiona Martin, spokeswoman for BHP, declined to comment on what percentage of the company’s coal contracts are settled on a quarterly basis. BHP Billiton-Mitsubishi Alliance, known as BMA, is the world’s biggest exporter of coal for steelmaking and operates seven mines in Queensland’s Bowen Basin.
Consumers Concerned “All our readings of the consumer side is that they’re very concerned about making sure that they have enough supply,” Andrew Harrington, an analyst at Patersons Securities Ltd. in Sydney, said Dec. 7. “This year has been unusual because we had a fair amount of rain up in the inland of Queensland in August and September, which is usually the dry period.”Queensland’s coal exports are worth about A$100 （$99 million） a day to the state, Michael Roche, chief executive of the Queensland Resources Council, said Dec. 7. “Some open-cut pits are now looking more like dams than mines,” he said.Australia is the largest producer of coal used in steelmaking, contributing more than 40 percent of the global seaborne trade, Deutsche Bank AG. said Oct. 19. The country is the second-largest exporter after Indonesia of the commodity burned for power.
“The market can respond far quicker than with the 12-month pricing and buyers will be prepared for an increase knowing they can always renegotiate the next contract,” said Gavin Wendt, a senior resource analyst at MineLife Pty in Sydney. “It’s a more fluid market. You probably won’t see the sorts of huge price movements that we saw a couple of years ago.”Steelmakers were hit with a threefold increase in annual contract prices to about $300 a metric ton in 2008 after heavy rains and floods affected mining in Queensland. This year, coal production and deliveries have been disrupted after Australia had its wettest September-to-November spring on record. BHP, the world’s biggest mining company, has urged the industry to move to short-term deals to make prices more responsive to market changes. It agreed with Japan’s JFE Holdings Inc. to the first three-month coking coal contract in March.Coking coal and iron-ore suppliers traditionally held annual talks with steelmakers to fix benchmark contracts for the 12 months from April 1, the start of the Japanese financial year. Quarterly accords mean producers can spread price increases caused by the rain over the course of the year.“Producers are not compelled to push for higher prices now to offset lost production, like they have in recent years, most notably the super-spike of $300 a ton,” UBS AG analysts led-by Sydney-based Tom Price said in an e-mailed note today. “They don’t have to wait another-12-months like they used to.”
Force Majeure
Production has been disrupted at mines operated by Macarthur Coal Ltd., Aquila Resources Ltd., Vale SA and Xstrata Plc. They have all declared force majeure, a legal clause invoked by companies when they can’t meet obligations because of circumstances beyond their control.“We’ve moved now to quarterly pricing, in the old days we had annual pricing,” Keith De Lacy, chairman of Macarthur Coal Ltd., the world’s largest producer of pulverized coal used in steel manufacturing, said on Bloomberg Television on Dec. 8. “The market responds a lot quicker to supply and demand.”BHP agreed with Japanese steelmakers to cut coking-coal prices by 7 percent in the three months ending Dec. 31. Kobe Steel Ltd. will pay $209 a metric ton, from $225 a ton in the quarter from July to September, Hiroyuki Hashimoto, a spokesman for Kobe Steel, said Sept. 1. JFE Holdings’ steel unit reached the same agreement, the company said.
Fiona Martin, spokeswoman for BHP, declined to comment on what percentage of the company’s coal contracts are settled on a quarterly basis. BHP Billiton-Mitsubishi Alliance, known as BMA, is the world’s biggest exporter of coal for steelmaking and operates seven mines in Queensland’s Bowen Basin.
Consumers Concerned “All our readings of the consumer side is that they’re very concerned about making sure that they have enough supply,” Andrew Harrington, an analyst at Patersons Securities Ltd. in Sydney, said Dec. 7. “This year has been unusual because we had a fair amount of rain up in the inland of Queensland in August and September, which is usually the dry period.”Queensland’s coal exports are worth about A$100 （$99 million） a day to the state, Michael Roche, chief executive of the Queensland Resources Council, said Dec. 7. “Some open-cut pits are now looking more like dams than mines,” he said.Australia is the largest producer of coal used in steelmaking, contributing more than 40 percent of the global seaborne trade, Deutsche Bank AG. said Oct. 19. The country is the second-largest exporter after Indonesia of the commodity burned for power.
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