Japan harvest collaboration and good market conditions
With the help of strengthening export market, particularly to
China, boosted financial results for the financial year ending in March 2003 are expected at the major Japanese steel makers. The rising price trend especially from the second half of 2002 have seriously contributed to this improvement in these companies' operating profits.
Japanese producers Nippon Steel, Sumitomo and JFE Holdings all are expecting to announce dramatically soaring earnings for this period. The common view of the companies is the help of the cost cuttings and consolidations performed throughout the year, on top of the aforementioned factors enhancing profitability. A JFE company official states that the domestic price recovery has also its share on these improved earnings.
Meanwhile, as a result of the three way strategic partnership established towards the end of last year, Nippon Steel, Kobe Steel and Sumitomo have started the cross supply. Under the framework of the agreement, Nippon Steel and Kobe Steel agreed to invest Yen 3 billion in each other, just as Kobe Steel and Sumitomo will do, in order to strengthen ties between the three firms. Furthermore, Nippon Steel and Sumitomo Metals took stakes in each other worth Yen 5 billion. Closing down the hot strip mill and one cold strip mill at its Wakayama plant of 3.4 million crude steel annual capacity was also included in Sumitomo Metal's plans by March 2005, in favour of purchasing these products from its two partners. The
slab production at Wakayama plant of Sumitomo is expected to continue after the deal with
China Steel Corp. (
CSC) increasing its
slab purchases from 600'000 tons to 1.8 million tons per year.
Sumitomo supplied Nippon Steel with 40'000 mts of semi-finished products including slabs, and some 10'000 mts of
pig iron came from Kobe Steel, supporting Sumitomo during its relining procedure of its No.4 blast furnace at Kimitsu.