Monday, March 14,
The magnitude-9.0 earthquake in Japan caused nearby steel plants to shut down operations..*
With Korean companies relying on Japan for 40% of their steel imports, a decline in steel imports should cause a short-term surge in steel prices, particularly for steel plates.
However, the overall beneficial impact is expected to remain limited, due to recent inflation and close ties with Japan in upstream industries (as local production and logistics in Japan have been greatly affected by the disaster).
Some key factors to be looked upon
* Steel plants on East Coast of Japan shut down
* More steel plants may halt operations, going forward
* Growth in local demand in Japan to reduce exports to Korea
* Filling of shortage by Korean producers to have limited impact
* Steel plants on east coast of Japan shut down
The magnitude-9.0 earthquake in Japan caused steel plants on the east coast – including JFE’s Chiba plant and Sumitomo’s Kashima plant -to shut down operations.
Tokyo Steel has also halted steel furnace operations at its Utsunomiya plant, due to power outages. While there has yet to be any reports of damages to other steel companies (such as Nippon Steel), considering the east coast locations of many of Japan’s steel plants,
“we expect most to have been affected by the massive earthquake” said an Industry analyst.
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