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| JISF Chairman Hints Possibility Of Japanese Integrateds' Production Cuts |
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Japan Iron & Steel Federation Chairman Shoji Muneoka (concurrently Nippon Steel Corp President) hinted the possibility of Japanese integrated steelmakers opting for production cutbacks, given a fall of steel demand, at the press conference he held Oct 21. The following are an outline of what he told the press conference. <>Japan's integrated steel companies, too, may need to reduce what they produce if steel demand indicates a pronounced decline. Among other things, the world's steel market conditions have changed completely for the past one month. <>The capital participation by the consortium of Japanese and South Korean integrated steelmakers in Brazil's iron ore mining company Namisa is expected to have little impact on the world's iron ore price negotiations. What Namisa puts out is unlikely to become the key to those price negotiations. The capital participation is intended to meet increased consumption of iron ore and iron ore pellets in the consortium members' blast furnace operations. <>Broadly speaking, sales prices of steel products are by no means determined by raw materials expenses alone. In the case of Nippon Steel, the company determines what prices to charge for commodity-grade steel products after due consideration of supply-demand conditions and cost factors. Also, the company makes it a rule to work out price terms after the comprehensive assessment of multiple factors such as product development power, proposal power and supply capability as to long-term supply contracts with major customers. <>It is likely that raw materials importing nations Japan, China, and South Korea will come under the most influence if BHP Billiton's proposal to acquire Rio Tinto has materialized. It is really regrettable that the Australian Competition & Consumer Commission has recently announced its position not to oppose the proposal. With an advanced oligopoly of the world's raw materials supplies, prices of iron ore have moved up by nearly twofold and those of coking coal by nearly threefold in 2008 from the levels of 2007. |
| last modified : Tue 28 Oct, 2008 [10:39] |
