Metallurgical Industry of Japan for half paralyzed as a result of the largest in the history of this country’s earthquake and tsunami. However, not all so sad, as they say it.

In in eastern coast

The biggest losses were industrial giants in the prefecture of Miyagi in place with the capital Sinday. Company Nippon Steel has already confirmed the flooding and de-energizing the entire plant Kamaishi Steelworks, which produces some-many 600 thousand tons of rebar annually, as well as the port, which was completely destroyed by the tsunami.

In the area of ​​the prefecture are also many smaller plants. In particular, this company JFE Steel, whose representatives have already confirmed the flooding of two of its plants – Sendai Works, which produces 800 thousand tons of steel a year, and Tohoku Steel, which produces a little less – 264 thousand tons. Also flooded Itoh Steel Plant in the city Isinomaki, its production capacity is 200 thousand tons, and the plant Tokyo Tekko (170 thousand metric tons) in Aomori Prefecture, Hasinoh.

South Coast

The south coast has suffered a little less than the east, located near the island of Hokkaido enterprise Muroran Works, which is part of Nippon Steel, reported that the severe damage the plant has not received, so in the near future the production of wire rod will be increased, because the need to compensate for the simple Kamaishi Steelworks.

Arrangement of plants of Nippon Steel

The next push of 7.4 points touched in Tokyo Bay, Ibaragi Prefecture. On the coast refineries are located the largest steel corporations in Japan, but the tangible element of the devastation caused them not. Moreover, the plant Kimitsu Steelworks (5,8 million tons of crude steel) in Nippon Steel, production resumed at the mill facilities and blast furnaces, which had previously been taken out of service.

After a devastating wave in the media once it was reported that JFE Steel – Chiba Works (2,57 million tons) – blazing with fire, however, JFE Steel denied this, saying that the fire was at the Keihin Works (2,7 million tons ) – a neighboring business, but it was not significant, and it was quickly extinguished. Moreover, on Sunday, JFE Steel blast furnaces started mothballed plants to Chiba Works and Keihin Works.

Arrangement of plants JFE Steel

The biggest wave of destruction caused coast of Tokyo Bay, there is a steel-making enterprise Kashima Works (5,7 million tons of steel), which is part of Sumitomo Metal Industries. On a day when there was a second impetus earthquake burned coke production plant, the fire was put out only a day later. The company also was forced to Kashima Works, for an indefinite period, to preserve two blast furnaces and other steel production.

Arrangement of plants Sumitomo Metal Industries

Electricity dependence

However, the Japanese steelmakers expect another test – expected shortages of electricity supply, due to emergencies at some nuclear power plants, namely, Fukushima and Onagava. Companies Nippon Steel and JFE Steel have had to halt some production at its small mills.

A significant part of steel in electric arc method are made in Japan and off the current negative impact on production. Tight Electric will have 18 companies, located in the Kanto plain, along the Tokyo and extending to Fukushima (Tokyo Steel Manufacturing in Utsunomiya, Kanto Steel in Tsusiura, Godo Steel in Funabashi). These giants produce a monthly basis in the aggregate of 400 thousand tons of crude steel for the construction industry, as well as obsepechivayut about 20% of the EAF in Japan.

Restricting the supply of electricity can affect directly Tokyo, Saitama, Chiba, Ibaragi, and other prefectures. Moreover, it is expected that the restriction of supply of electricity will affect most of Tokyo, Chiba, Saitama, Ibaragi, and several other prefectures.

Consumption will grow, but not right away

Japan currently holds the second largest steel production in the world (110 million tons in 2010), the share of its steel mills accounted for 10% of the total steel production in the world. Deutsche Bank estimated the Japanese perspective, the element will affect about 40% of the steel industry in Japan. In general, losses may range from 15 to 20 million tons per year, which is not critical for the global market.

The leading steel manufacturers in Japan, data for 2009:

Deficiency of steel in the world will be, but it will cover other manufacturers from other countries, most likely the South Korean Hyundai Steel and Posco. Moreover in the market of Southeast Asia, Japanese niche will press the Chinese, Russian and Ukrainian steelmakers.

Of course, in Japan, soon expected consumption growth, which is due to the need to restore the destroyed infrastructure. However, it will not happen until the second half of the year, and while demand will fall. After the metal tied other industries and other consumers of the metal.

To turn the Japanese auto industry. Temporarily closed automobile Nissan, Suzuki, Toyota, Honda and Mitsubishi. Production of electrical household appliances and paralyzed: Toshiba, Sony, Panasonic, Fujitsu.

market iron ore suited « to the bottom »

Another element will be the inevitable orgy of increasing volatility quotes of iron ore.

In fact, five steel mills that are affected by the elements, will be idle for six months. Supply of raw materials for these enterprises is carried out on futures with the Brazilian company Vale SA, the rest of the raw materials are purchased on the spot market in Australia.

For their needs staleleteynaya industry imports about 22.2 million tonnes of iron ore, which, due to inactivity of some enterprises will be unused on the market. Against this background, spot quotations of iron ore has already begun to fall, never reaching a record $ 200 per ton. Quotes reached a minimum of three and are $ 170 per ton.

Thus, all the same disasters, “planted a pig,” the world’s largest producers of ore – BHP Billiton, Rio Tinto and Vale, who in early March, voiced their appetite for new ore from April 1, suggesting the growth of 20-23% of the contract prices. So at the moment they do it will be very difficult, even assuming that under the terms of contracts for the II quarter of the price will be based on the average price of December, January and February.

In fact the problem is not only in stopping the steel mills, and there are enormous problems with logistics, since the ports do not work, handling infrastructure inflicted, warehouses, g / d and highways damaged. So first of all, restoring deterrent factor in the steel industry in Japan, it is the transport problem.