Nippon Steel said that it expects the current correction in Asia''s steel market to be short lived and momentum to recover in October to December after output cuts and destocking in China.
The region''s steel export market has collapsed in the current quarter after China boosted exports in May and June, ahead of tax changes aimed at making exports more difficult, prompting industry leader Baosteel to cut its hot and cold rolled steel prices for August shipment by as much as 5%.
Mr Shinichi Taniguchi EVP of Nippon Steel said that "We expect Chinese steel prices to recover after a run down in inventories in October to December period, with the strong momentum spreading to the region''s export market."
He said that the company aimed to boost its export price for hot rolled coil above USD 700 a tonne during the final quarter of the year, after a more than USD 50 dip in July to September 2010 period.
But Mr Taniguchi said that the company had yet to confirm any signs of a run down in inventories in China. He added that "The recent rebound in the iron ore price is totally groundless and nobody knows who''s buying."
Mr Taniguchi said that Nippon Steel is expecting an expansion in its profit margin in the October to December 2010 quarter as market conditions improve, but a recent rise in iron ore prices could dash those hopes and actually end up eroding margins.