Slow Japan supply raises international demand for recycled steel
| 25 April 2011
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As necessary as recycled steel is for the creation of new steel products, it may be needed now more than ever after the recent natural disaster in Japan.
Operations have been suspended and production has come to a halt for various steel mills and manufacturing facilities all over the country of Japan. Conditions of facilities need to be checked and re-checked before determining definite impacts on production schedules. Japanese blast furnaces are well made, and unlikely to be drastically affected, yet Sumitomo Metal Industries still reported a breakout fire, and two of JFE Steel’s blast furnaces idled after the earthquake.
While companies like Nissan Motor, Fuji Heavy Industries, Toyota, Honda Motor, and Nippon Steel Corp. have temporarily closed plants for the safety of employees, others like Kimitsu Works have already partially resumed operations.
The steel production is obviously suffering major setbacks, but while the supply is low the demand is expected heighten with Japan’s redevelopment. This results in an expected increase of steel prices all over Asia, as the ports’ closings are the most influential factor in the supply chain.
Japan is, or was, a big exporter for all of Southeast Asia. As prices go up, the exporting will decline partially due to the supply squeeze and also as a result of rebuilding efforts. Cement and steel will be in high demand when the Japanese begin their domestic recovery. To fill this gap, China manufacturers will likely increase their steel exports.
Placing more weight on the desire for recycled steel is the serious decline in iron ore imports that Japan will also face. Last year, the Japan steel mills brought in a whopping 10 percent of all global iron ore imports. Their financial crisis and mill closings from the tsunami in March this year will reduce market demand for iron ore by about 20 million tons.
Recent destructive events in Japan seem to be an ongoing disaster, and the domestic crisis is rippling effects on the international market. The demand for steel combined with the inability to supply in Asia will put pressure on China. This pressure could turn negative, and may have already started as China recently stopped accepting orders from Japan due to the radiation scare. The Japan Iron and Steel Recycling Institute is reporting numbers that show the need for other countries to get in the habit of recycling steel and iron.
As the air bubble gets pushed around Asia and soon to the U.S. and Russia, it is important that individuals start recycling the steel and iron used around them to keep production flowing. Steel can be found in multiple places and is used daily. However, to keep the manufacturing of steel, which is imperative for strong capital, we must recycle it. Iron ore shortages automatically decrease the generating of new steel, putting more emphasis on the need for recycled steel.
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