September 06, 2008

Nippon Steel upbeat on steel demand in Asia and US

Reuters reported that Nippon Steel Corp, the world's second biggest steel maker is finding it hard to meet strong demand for steel in Asia and the United States, denying worries that the effect of subprime loan problems will depress the emerging economies.

The report quoted Mr Akio Mimura president of Japan as saying that he expects steady expansion of the global economy to offset a slowdown in the US economy. He added that "Demand in Asia and the US for car sheet and parts is strong, making it hard for us to meet orders."

Mr Mimura said that "Japanese carmakers are upgrading their production plans. There is a big gap between the views of manufacturers and financial industry people, who are really pessimistic about the effect of subprime loan problems.”

Mr Mimura said Nippon Steel's stock price is too cheap at the current level and does not reflect the company's fundamentals. He added that “Shares in Nippon Steel have lost by 8% in 2007, battered by worries about the impact of the credit squeeze on emerging markets and the prospect of surges in iron ore and coking coal prices from next April. That has wiped out sharp gains in its stock price in the first half, a result of a series of measures Mimura took to expand its output and market capital, and guard itself against a potential bid from ArcelorMittal.”