Bloomberg reported that demand for steel in Japan will likely fall this fiscal year as customers including carmakers slash production following the nation''s worst earthquake.
Mr Eiji Hayashida chairman of Japan Iron & Steel Federation said that "The earthquake has had a serious impact on Japanese manufacturers. Even if there''s demand for restoration and reconstruction, domestic demand will likely fall."
Mr Hayashida said that the industry has yet to give an updated forecast for steel production after the quake. In December 2010, the federation said domestic steelmakers will produce about 110 million tonnes of crude steel for the financial year through March 2012, little changed from the year earlier.
Mr Hayashida said that while the disaster created an emergency demand for steel used in temporary houses for evacuees, the amount is not significant.
He added that steelmakers expect demand for steel used in reconstruction of areas affected by the earthquake and tsunami will increase after the summer. He is also the president of JFE Holdings Inc''s steel unit, Japan''s largest mill after Nippon Steel Corporation.
Mr Hayashida said that steelmakers will also unveil a plan by the end of this month on how the industry can save electricity. The earthquake prompted Tokyo Electric Power Co. to shut power plants including the crippled Fukushima Dai Ichi nuclear facility. The government wants companies to reduce power use by as much as 25% this summer to avoid large scale blackouts.
According to the Japan Automobile Dealers Association, the 9.0 magnitude earthquake and tsunami that struck Japan on March 11th 2011 prompted automakers and electronics companies to shut plants, delaying steel sales to customers. New car sales in Japan decreased 37% in March from a year earlier, the biggest drop for the month.
( Source: www.steelguru.com )