SteelOrbis Shanghai
President of Japanese steelmaker Nippon Steel, Shoji Muneoka, has stated that, as the company cannot forecast steel demand clearly due to the current financial crisis, it has decided to delay its contract price negotiations for next year with iron ore mining companies BHP Billiton and Rio Tinto.
The Nippon Steel president went on to say that the global economy is currently experiencing great chaos, and that the widening credit crunch has resulted in a significant decline in demand for cars, ships and buildings, prompting mills to cut output, and raising expectations that iron ore prices will drop in the next year.
"We cannot forecast steel demand until the credit crunch and the big fluctuations in stock prices and foreign exchange rates stabilize at certain levels,'' Mr. Muneoka said. "We may need to cut production further," He added.
It has been predicted that Japan's crude steel output could drop to 110 million metric tons in the year starting April 1, 2009, 8.3 percent less than the 120 million tons forecast for the current fiscal year.
Annual iron ore contract negotiations between Asian steelmakers and the ore miners traditionally begin in the current month.