JFE may build a new steel plant in SE Asia

Thursday, 13 Oct 2011

FT reported that JFE Steel is preparing a plan to build a new USD 3 billion steelmaking unit in South East Asia.

If the company goes ahead with the plan, it would mark the first time since the Second World War that any large Japanese steelmaker has built a large integrated plant outside Japan.

Mr Eiji Hayashida CEO of JFE told the Financial Times that a decision over going ahead with such a plant was likely within the next two years and could possibly be with a local industry partner.

He added that "It' the only way I can see to provide for the possibility of longer term growth for JFE, since I can see the opportunities for providing more steel in the company’s main traditional markets will be limited."

The countries JFE is most likely to choose for a new site includes Thailand, Malaysia, Vietnam and Indonesia. Possible collaborators with JFE could include the steelmakers JSW of India and Thailand's Sahaviriya Steel Industries.

According to Mr Hayashida, in each of these countries, the longer term growth prospects for steel seemed better than in Japan, China and South Korea, which have acted as the main growth locomotives for JFE over the past 20 years.

In 2010, JFE made 32.7 million tonnes of steel, behind the 36.1 million tonnes of steel produced by Nippon Steel, its larger Japanese rival. This year JFE’s output is likely to be down to 31 million tonnes, of which about 17 million tonnes will probably be sold in Japan.

Mr Hayashida said that manufacturing in Japan had settled into what he thinks will be a long term steady decline as a result of rising environmental regulation, the strong yen and problems over guaranteeing energy supply at a reasonable cost.

As for China, he thinks the economy is likely to grow but at a slower rate than recently, partly because of concerns by the Chinese authorities about keeping inflation under control.

The JFE head also thinks growth in demand for steel from China will be reined back due to what he feels will be a slowdown in exports of goods from China to Europe over the next two years, as a result of the eurozone crisis.

He said that "I'm very worried about the damage that I think is being done to the European economy by the economic uncertainties. In my view these problems are going to cause damage to the Chinese economy as well."

(Sourced from Financial Times Limited)

Japan JFE says aims to boost ties with India's JSW

Mon Aug 22, 2011

TOKYO Aug 22 (Reuters) - JFE Steel Corp , the world's fifth-biggest steelmaker, said on Monday it would strengthen its ties with India's JSW Steel Ltd by either boosting its stake in the company or increasing its presence on the smaller firm's board.

Under so-called 'equity-method' accounting rules, JFE could report part of the Indian company's net profit in its consolidated results if it holds more than 15 percent of its stock or has representation on its board of directors.

"We hope to make JSW an equity-method company of our group," Eiji Hayashida, president of JFE Steel, told the Nikkei business daily in an interview on Sunday.

"I have told (managing director Sajjan) Jindal about our intentions and we have had no negative response so far."

JFE last year spent about $1 billion acquiring a 14.9 percent stake in JSW, India's No.3 steelmaker, in an attempt to gain a foothold in the fast-growing Indian market.

The stake, just shy of the level that would have triggered a mandatory public offering at that time, was JFE's first major capital investment in a foreign peer.

Hayashida also said in the Nikkei that JFE planed to join JSW's project to build a new integrated steel mill in India and that it was in talks with management on its ownership ratio.

"Our ownership will be below 50 percent," he said, citing potential difficulties for a foreign company in managing large numbers of local workers.

Japan July crude steel output almost flat

Fri Aug 19, 2011

* Output falls 0.8 pct from June on daily basis
* Output drops 1.2 pct yr/yr for fifth-consecutive fall
* Higher auto output offers some hope, but yen clouds export outlook

TOKYO, Aug 19 (Reuters) - Japan's crude steel output was almost flat in July from the previous month, as the strong yen hurt steel exports while carmakers ramped up production following a post-quake slump.

Crude steel output totaled 9.11 million tonnes in July, down 0.8 percent on a daily production basis from June after adjustment for the number of days in the month, the Japan Iron and Steel Federation said on Friday.

From a year earlier, output fell 1.2 percent for a fifth consecutive year-on-year fall. That was an improvement, however, from a 5 percent drop in June, a 7 percent slide in May and a 6 percent drop in April, after the devastating earthquake on March 11.

"We expect steel demand to further increase in the coming months thanks to higher output at carmakers, but the strong yen is worrying," an industry official said.

Exports of Japanese steel products plunged 9.3 percent from a year earlier to 3.5 million tonnes in June as the yen hovered near a record high against the U.S. dollar. That was a fourth consecutive year-on-year decline.

Japan's five blast furnace steelmakers, including the world's No.4 steelmaker, Nippon Steel Corp , and fifth-ranked JFE Steel Corp , plan to produce 21.35 million tonnes in the July-September third quarter, 7 percent more than in the second quarter, as they target growing demand from carmakers.

Second-quarter output of 19.89 million tonnes was the lowest in two years due to the impact of the earthquake, which damaged Sumitomo Metal Industries Ltd's plant on the northeast coast.

JFE Steel may cut output as quake hurts demand

Tue Apr 19, 2011 7:41am GMT

* Fall in March crude steel output may be less than 1 mln tonnes
* Japan February crude steel output was 8.93 mln tonnes
* JFE faces higher inventories, may consider output cuts
* Slumping car production is a concern (Adds March crude steel estimate)

TOKYO, April 19 (Reuters) - JFE Steel Corp , the world's fifth-biggest steelmaker, is facing rising inventories due to weak demand from domestic manufacturers following last month's devastating earthquake and tsunami and may need to cut production ahead, the company's president said on Tuesday.

Eiji Hayashida, also chairman of Japan's Iron and Steel Federation, told a news conference for the industry body that the impact of the quake on the output of steelmakers may have been smaller than expected in March, but that shutdowns of car and parts plants may take a heavy toll on steelmakers' production after May.

The magnitude 9.0 earthquake and tsunami on March 11 has forced Toyota Motor Corp and many Japanese carmakers to operate at 50 percent of their target plans as the quake disrupted their parts supply chains and triggered power outages and an ongoing nuclear crisis.

"JFE will decide in early May whether it needs to cut output after seeing carmakers' production levels," Hayashida said.

He said Japan's crude steel output in March may have been reduced by less than 1 million tonnes from February's 8.93 million tonnes, smaller than expected by many industry watchers.

The disaster will end a run of 16 consecutive monthly year-on-year rises in crude steel output, which had become increasingly robust on buoyant exports to Asian consumers.

The earthquake prompted JFE, Nippon Steel Corp and Sumitomo Metal Industries Ltd to temporarily halt their 7 blast furnaces in east Japan, but damage to production facilities was relatively small except for Sumitomo Metal's Kashima plant, which is located closest to the earthquake's epicentre.

Hayashida said demand from domestic manufacturers has been slumping since the quake, and he expects domestic demand for crude steel to decline this financial year despite a pick up in reconstruction demand after the summer.

The steel body will on Wednesday reveal crude steel output data for March and for the 2010/11 financial year ended on March 31.

(Reporting by Yuko Inoue; Editing by Chris Gallagher and Joseph Radford, sourced Reuters)

JFE bullish on shipment outlook on strong Asia demand

Mon Mar 28, 2011 1:08pm GMT

* No plans to change H1 shipments forecast - JFE
* Expects H1 sales to top H2 sales of current fiscal year
* Carmakers' output halts could spur Japan steel exports
* METI skips April-June steel demand outlook after quake

(Recasts with JFE comment) TOKYO, March 28 - JFE Steel Corp (5411.T: Quote), the world's No.5 steelmaker, has no plan to change its strong sales outlook after April as robust demand in Asia will likely offset production loss at its domestic customers after the March 11 earthquake.

Japan's biggest ever earthquake, which has left more than 27,000 dead or missing, has caused production halts at a wide range of steel-user companies, including their biggest client Toyota Motor Corp (7203.T: Quote), raising concerns that steelmakers' shipments and earnings will take a hit.

"We still expect our April-September sales will likely exceed sales in the October-March period as Asia's demand remains strong, enough to offset the impact of the disaster," Hiroshi Maki, manager at JFE's sales, planning and coordination division, said on Monday.

JFE has yet to reveal its first-half output plans.

Its October-March production plans call for a 6.4 percent growth in steel shipments at 13.36 million tonnes over a year earlier, counting on higher exports to markets like South Korea, China and Taiwan.

Nippon Steel (5401.T: Quote), JFE and Sumitomo Metal Industries have resumed operations of all seven blast furnaces idled after the quake to cope with rising construction demand and also to increase power supply to the region's struggling electric power companies.

But confusion in distribution channels and shutdowns at carmakers could lead to higher inventories at steelmakers, prompting Nippon Steel and JFE to turn to export markets to make up for sluggish domestic demand.

Lost car production in Japan in the two weeks since the quake has topped a third of a million vehicles, and it could be months, rather than weeks, before the country's automakers get back on track.

Prolonged production delays at domestic steel-users would also make it hard for steelmakers to pass on higher input costs.

"What worries me most is user-companies' output plans," said Takashi Murata, an analyst at Daiwa Securities Capital Markets.

"It will be really tough for steelmakers to pass on higher input costs if their production lines are suspended."

Nippon Steel last month said it was seeking a roughly 25 percent price hike from domestic contract manufacturers after April to cover surging input costs.

Japan's trade ministry said on Monday it would not make its regular estimate on crude steel output for the April-June quarter due to production halts at firms such as carmakers.

An official from the Ministry of Economy, Trade and Industry said it had yet to finish surveying the impact of the quake, but added it may release a quarterly steel production forecast on May 9 as planned.

POSCO lifts sales target on Japan order

Thu,Mar24, 2011 |Source:Reuters

South Korea's top steelmaker POSCO said on Thursday it had revised its sales volume target up by 1 million tonnes and will raise output to meet orders from clients in disaster-hit Japan.

Hwang Eun-Yeon, executive vice president at POSCO, also told the Reuters Global Mining and Steel Summit that the world's third largest steelmaker is finding it hard to fully pass on USD 160-USD 180 per tonne of increased costs to clients in the second quarter.

"We are aiming to meet the requests (from Japan) by raising output, although we cannot meet all," Hwang said, adding that it aims to sell more than 35 million tonnes of steel products this year from its previous target of 34 million tonnes.

South Korea's top steelmaker expects to receive a minimum of 1.5 million tonnes of steel requests from Japanese clients this year after Japan's worst quake on record, Hwang said.

Japanese steel mill Nippon Steel, JFE Steel and Sumitomo Metal Industries said on Tuesday that their quake-hit furnaces were resuming operations after being hit by March 11 earthquake and tsunami.

Shares of Korean steelmakers including POSCO, whose leading shareholders include Berkshire Hathaway Inc, rallied after the quake, on expectations that they would benefit from reduced shipments from Japan at home and the Asian markets.

Shares of POSOC closed 0.4% lower at 497,500 won on Thursday, underperforming the broader market.

Hard to fully pass on cost rise to clients

Asked how much and when POSCO would raise prices, Hwang said: "We need to raise steel prices by 200,000 won (USD 178.3) per tonne due to rising costs, but I don't think we can raise that much." POSCO is considering lifting prices in early or middle part of April-June period, he added.

Analysts ranged POSCO's possible price hikes at 100,000 won through 150,000 won, while Hwang said "100,000 won was too low."

Lee Won-jae, an analyst at SK Securities, said: "Even if POSCO were to raise more than 100,000 won, it would be difficult to maintain such prices due to the gap with imports from Japan and China. The domestic market is driven by buyers, not sellers."

POSCO has held local steel prices flat since it hiked in June 2010 for third-quarter sales. For the October-December quarter last year, POSCO posted lower-than-expected profit because of its failure to pass on surging costs to customers.

South Korea's second-largest steelmaker Hyundai Steel said on Tuesday it needs to hike major steel product prices no later than early April. Two leading Chinese steelmakers increased prices for the third month in a row for March, before keeping them unchanged for April.

Hwang said Asia's steel demand is seen healthy, driven by expected demand as Japan moves to repair quake-related damages, adding that China's recent efforts to tame inflation through tighter monetary policy were "not too worrisome."

"The quake dampens Japan's steel demand in the short term, but eventually the demand will jump because a large amount of industrial materials are in need for reconstruction," he said.
Tags: POSCO, steelmaker, South Korea, Japan, Hwang Eun-Yeon

Japanese companies may set up steel plants in India

Monday, 14 Mar 2011 |By ET

ET reported that deadly earthquake in Japan could likely push steel companies from that country to speed up plans to build manufacturing presences in safer and low cost countries such as India.

The report quoted some industry executives who have collaborated with Japanese steelmakers for joint ventures as highlighting this possibility.

Mr CS Verma chairman of SAIL, which has a tie up with Kobe Steel to use low grade iron ore for steelmaking, said that “It is too early to say anything, but definitely, Japanese companies should explore the idea of having larger manufacturing plants in India as we have the market as well as resources here.

Apart from a safety perspective, the strong steel demand pattern in India can be attractive for the technologically advanced country like Japan, which has established its supremacy in making high tensile sheets for car bodies and for use in consumer goods.

Japan’s top four steelmakers Nippon Steel, JFE Steel, Sumitomo Metals and Kobe Steel already have a presence in India through joint ventures.

The earthquake and tsunami has affected major steelmakers along Japan’s Pacific coast. The coke oven gas plant at JFE Steel’s Chiba works caught fire. The integrated works in raw materials yards on Tokyo Bay such as Nippon Steel’s Kimitsu works and JFE Steel’s Chiba and Keihin works have also been affected. The most affected region, Sendai city itself is home to JFE Bars & Shapes and Itoh Steel.

JFE: Production lines halted at a plant due to power outage

TOKYO, March 14 (Reuters) - JFE Steel Corp , the world's No.5 steelmaker, said on Monday shipments from its 10 million tonnes per year Higashi Nihon plant near Tokyo have virtually halted due to a power outage.

"Production lines have stopped as we need to cooperate with the government's power cut plans," a company spokesman said.

JFE resumed operations on Sunday of two blast furnaces at its Higashi Nihon plant, one of its two mainstay plants, that were idled after Friday's quake and tsunami.

JFE has total production capacity of about 32 million tonnes, and operates a bigger plant in western Japan with a capacity of more than 20 million tonnes a year.

(Reporting by Yuko Inoue, sourced:Reuters)

Japan-Korea partnership to buy 15 percent stake in Brazilian niobium company

Friday, 04 March 2011

A Japanese investor group consisting of JFE Steel Corporation, Nippon Steel Corporation, Sojitz Corporation and Japan Oil, Gas and Metals National Corporation and a Korean investor group consisting of major Korean steel producer POSCO and South Korea's National Pension Service have entered into an agreement with the controlling shareholders of the Brazilian niobium company Companhia Brasileira de Metalurgia e Mineração (CBMM) under which the Japan-Korea partnership will acquire a 15 percent stake in CBMM.

Niobium is a critical alloying additive in the production of high-grade steel products. As the most comprehensive supplier of niobium products in the world, CBMM is in a position to secure a continuous supply system of the metal as the need for high-grade steel products grows.

The four Japanese companies will acquire a 10 percent stake and the two Korean companies will buy a five percent stake in CBMM. The amount of the investment by the Japan consortium and the Korea consortium will be $1.3 billion and $650 million respectively, and each of the six consortium partners will indirectly hold a 2.5 percent stake in CBMM.

In addition to the acquisition of CBMM shares, JFE, Nippon Steel, POSCO and Sojitz have entered into a long-term niobium supply agreement with CBMM, assuring that the stable relationship these companies have long had with CBMM continues. (sourced:steelorbis)

Nippon Steel extends interest in Integra Coal Joint Venture in Australia

Friday, 04 March 2011

Japan's largest steelmaker Nippon Steel Corporation has announced that it has concluded a sales agreement with Toyota Tsusho concerning the purchase of 2.35 percent interests owned by Toyota Tsusho via its Australian subsidiary in the Integra Coal Joint Venture in the province of New South Wales, Australia.

Nippon Steel, already holding an interest of 3.6 percent in this JV, with this additional purchase will own an interest of 5.95 percent.

"This additional purchase of interests in this JV will add strength to Nippon Steel's capabilities and endeavors to ensure stable procurement of semi-soft coking coal for the future," reads Nippon Steel's statement.

Integra Coal Joint Venture, heretofore operated by the respective Australian subsidiaries of Vale, a global resources company, POSCO, a Korean steel company, JFE/JFE Shoji Trade, Toyota Tsusho, and Nippon Steel, produces about 3.3 million mt a year of semi-soft coking coal and steaming coal.(sourced:Thomson Reuters)

Nippon and JFE Steel raising stakes in Australian coking coal mine

Thursday, 03 Mar 2011, The Nikkei

Nikkei reported that Nippon Steel Corpand JFE Steel Corp said that they will purchase additional rights to an Australian coking coal project from Toyota Tsusho Corp.

By May, Toyota Tsusho will unload 13% of its rights, selling 2.35% each to Nippon Steel, the JFE Holdings Inc unit and POSCO. Their interests will swell to 5.95%.

The remaining 5.95% will be bought by Chubu Electric Power Co since the mine also produces regular coal for use in power generation.

The Integra Coal Joint Venture, located in the state of New South Wales, produces 3.3 million tonnes of coking and other coal annually and is expected to continue supplying the materials for another 20 years.

Brazilian resource major Vale SA holds a 61.2% interest, followed by Toyota Tsusho with 28%. Nippon Steel, JFE Steel and South Korea's POSCO each own 3.6%.

Tags :New South Wales, Japanease market, raw material, Posco steel, Vale SA,

Nippon says Y20,000 price hike needed after April

(Update1- Nippon Steel sees input costs up by Y15,000/tonne)

* Nippon says Y20,000 price hike needed after April

* Says price increase necessary due to higher input costs

TOKYO Feb 28 (Reuters) - Nippon Steel Corp expects major input costs to rise by more than 15,000 yen ($183.50) per tonne after April, a company official said on Monday.

Due to the rise in input costs, Nippon Steel estimates that a price hike of about 20,000 yen per tonne is necessary for its steel products in general, Kozo Uchida, a senior Nippon Steel executive, told reporters.

That may be equivalent to a nearly 25 percent price hike, given Nippon Steel's average product price of about 82,000 yen planned for the year to March 31.

Its smaller rival JFE Steel last week told primary distributors that it would raise prices steel sheets by 20,000 yen per tonne, signalling to volume contract users such as Toyota Motor Corp the level of price hike it seeks.

Big steelmakers usually push through a price hike among its primary dealers first before starting tough pricing talks with volume users, who buy on contracts, like car and electronics makers and shipbuilders. (Reporting by Yuko Inoue; Editing by Chris Gallagher,sourced:Thomson Reuters)

Nippon Steel plans 20 pct price hike - Nikkei

Fri Feb 25, 2011 5:06am GMT

* Will ask customers to accept around $240 hike -Nikkei

* JFE also seen asking for similar rise

Feb 25 (Reuters) - Nippon Steel Corp (5401.T: Quote) will ask auto makers and other major customers to accept a roughly 20,000 yen ($242) a tonne price rise for steel products starting in April, the Nikkei business daily said, as soaring material costs take their toll.

Nippon Steel, the world's No.4 steelmaker, will propose the around 20 percent jump as early as mid-March, the daily said on Friday.

That would be in line with rival JFE Steel Corp's (5411.T: Quote) announcement on Thursday that it would up prices of steel sheet for sale through domestic wholesalers by 20,000 yen per tonne from April, signalling to volume contract users such as Toyota Motor Corp (7203.T: Quote) the level of price hike it seeks. [ID:nTOE71N01S]

Asia's steelmakers aim to pass on climbing costs for iron ore and coking coal, the prices of which are expected to climb sharply after April.

But negotiations with their customers, who buy on contract, are expected to be tough. Nippon Steel and JFE have not yet fully passed on the sharply higher input costs from the second-half of the 2010/11 financial year.

The spot price of hard coking coal in Australia in the December-February period, which will be reflected in the April-June contract price, will likely average $279 per tonne, data service company Argus Media Ltd said.

That could mean an about 27 percent price hike in coal during April-June from the previous quarter. ($1 = 82.755 Japanese yen) (Reporting by Yuko Inoue in Tokyo and NR Sethuraman in Bangalore; Editing by Joseph Radford, sourced:Thomson Reuters)

Monthly Coking Coal Price Setting 'Unacceptable': JFE Chief

Wed,Feb23, 2011

TOKYO (NQN)--Japan Iron and Steel Federation Chairman Eiji Hayashida said Wednesday BHP Billiton's call to revise coking coal prices monthly is "completely unacceptable."

Hayashida, also the president of JFE Steel Corp., made the comment in connection with the news that the Anglo-Australian resource giant asked major Japanese steelmakers to reset prices monthly rather than quarterly beginning in April.

Hayashida admitted such negotiations are taking place.

But he rejected the call, saying, "If prices of basic materials such as iron and steel change in the short term, it will make it harder for companies that order steel products to develop a purchase plan as well as to forecast earnings."

Tags: iron ore, steel, Anglo-Australian resource, raw mat

JFE Steel to set up JV of color coated steel

Sunday, 20 Feb 2011

It is reported that JFE Steel and JFE Shoji Trade Corporation of Japan are currently in talking with Suzhou Hesheng Special Material of China to set up a JV for making color coated steel flat products

It is said that Suzhou Hesheng would enhance its production to higher grade along with more production volume and JFE Steel would to secure its supply from its Japan's plant and Guangzhou JFE Steel Sheet.

(Sourced from YIEH.corp)