Japanese Steel Production Blast Hits Price Increases in Heavy Iron Ore and Coal Imports

JOHANNESBURG--August 5, 2008--Researched by Industrial Info Resources (Sugar Land, Texas)--In the first six months of 2008, Japan's steel production was on track to sustain the record production levels produced between March 2007 and March 2008, when it hit 121.5 million tons for a year-over-year increase of 3.2%. Japan's foreign trade statistics show that iron imports in June increased 2.32 million tons to 13.09 million tons, up 21.6% year over year. Iron ore imports represented 1.7% of total imports of goods and services into the country for June. The price of ore was up 14.6%. Major Japanese steel companies reached an agreement with Xstrata (LON:XTA) (Zug, Switzerland) in late July to accept a price rise by a factor of 3.6 for low-grade metallurgical coal from Australia to about $240 per ton. Steel customers across the board will feel the effect of the price rise, which will increase industry costs by about $975 million. In April, Japanese steel makers struck an agreement with BHP Billiton (NYSE:BHP) (Melbourne), which saw the price of quality coking coal triple to $300 per ton.