At 1:46 pm Beijing time, March 11, 2011, an earthquake measuring 9 Km (Japan Seismological Bureau) occurred 130 kilometers east of Sendai Port, Honshu Island, Japan. The depth of the source was 24 kilometers, and in the following two days, the area was again After the occurrence of more than 6 magnitude aftershocks, Japan's northeastern region and the Kanto region were most affected by the earthquake. These two regions are Japan's industrial heavyweights and have concentrated on a large number of pillar industries such as steel industry, petrochemical industry, and manufacturing industry. As the world’s second largest steel producer and the largest steel exporter, Japan’s strong earthquake will have a major impact on the international steel market.
1. The impact analysis of iron and steel production is shown in the following table. According to company announcements and public information, the earthquake directly affected the production capacity of about 26 million tons of crude steel in Japan's three major steel plants. The most influential steel products are sheet and plate. It is mainly used in the automotive and shipbuilding industries, and the next most important ones are wire rods, which are mainly used in the automotive and construction industries. The production capacity of stainless steel, profiles and steel pipes is also affected.
Kyoei Steel, the largest rebar manufacturer in Japan, has not yet disclosed relevant information and it is not yet clear what the impact will be. Japan's fourth largest steel plant, Kobe Steel, is far away from the source of the shock and should not be affected. The fifth-largest steelmaker, Tokyo Steel, has a subsidiary company in Utsunomiya that is closer to the source and is expected to have some impact.
There are other small steel mills in the northeastern region and the Kanto region, which are estimated to be affected. It is estimated that this earthquake will affect at least 30 million tons of steel production capacity in Japan.
In an interview with the author, the metallurgical equipment supplier Danieli Company’s engineering appraisers said that the general steel mills will consider earthquake resistance when they are established. This earthquake has led to leakage of nuclear power plants with higher earthquake resistance levels. It is believed that many steel mills cannot afford it. An accident occurs during the production process of the blast furnace and converter of a steel mill. It takes a long time to repair and may take 6-10 months. If it is rebuilt, it will take several years. In addition, if the foundation of the rolling mill changes, it will take a long time to re-commission.
According to media reports, the earthquake also severely damaged some of the ports close to the steel plant. Since Japanese steel mills rely on imported raw materials and steel exports from ports, even before the port was repaired, even if the steel mills were not damaged by the earthquake, their production could not proceed smoothly.
Judging initially, the steel mills affected by the earthquake will need to suspend production for at least six months, reduce steel production by 2.5 million tons per month, about 30% of normal production, and accumulate a minimum of 15 million tons of production.
2. Impact on the international steel market The impact of the earthquake on the international steel market was first reflected in the raw materials. The suspension of production of the three major steel plants will directly affect the demand for international coking coal and iron ore. It is expected that the demand for iron ore will increase in the next six months. It will reduce 3.5 million tons per month and reduce coking coal by 1.7 million tons.
At present, the spot iron ore market is in a downtrend channel, and the earthquake will speed up the decline, and the decline will also exceed the previous market forecast. For the spot coking coal market, the impact of flooding in Australia will also be offset by the Japanese earthquake, and prices will return to a reasonable level.
In 2010, Japan imported 4.26 million tons of steel (excluding semi-finished products), which accounted for about 6.6% of its apparent consumption. The main sources of imports were Korea, China, and Taiwan. The main varieties imported are hot coils, cold coils and galvanized sheets. Compared with exports, Japan's imports are very low, and its impact on the external market is negligible.
In 2010, Japan exported 43.4 million tons of steel, which accounted for approximately 45% of its output. It is the world’s largest steel exporter and its main export destinations are Korea, China, and other parts of Asia. The export varieties are mainly hot coil, galvanized sheet, cold coil, medium plate, welded pipe, electrical steel and stainless steel. These steels are mainly used in industries such as automobiles, home appliances and shipbuilding.
The production capacity affected by the earthquake is mainly thin plates and medium-thick plates. It is expected that the export volume of Japanese thin plates and medium-thick plates will be significantly reduced in the next six months. The supply and demand balance of these two varieties in Asia will be broken, and the market price is expected to rise accordingly. It is estimated that after two or three months, Japan's post-disaster reconstruction will begin, which is expected to boost the export of construction steel in Asian countries.
Automobile factories, shipyards and home power plants in Asia will be affected by the rise in steel prices, while large steel mills in China and South Korea may benefit from falling raw materials and rising steel prices.
1. The impact analysis of iron and steel production is shown in the following table. According to company announcements and public information, the earthquake directly affected the production capacity of about 26 million tons of crude steel in Japan's three major steel plants. The most influential steel products are sheet and plate. It is mainly used in the automotive and shipbuilding industries, and the next most important ones are wire rods, which are mainly used in the automotive and construction industries. The production capacity of stainless steel, profiles and steel pipes is also affected.
Kyoei Steel, the largest rebar manufacturer in Japan, has not yet disclosed relevant information and it is not yet clear what the impact will be. Japan's fourth largest steel plant, Kobe Steel, is far away from the source of the shock and should not be affected. The fifth-largest steelmaker, Tokyo Steel, has a subsidiary company in Utsunomiya that is closer to the source and is expected to have some impact.
There are other small steel mills in the northeastern region and the Kanto region, which are estimated to be affected. It is estimated that this earthquake will affect at least 30 million tons of steel production capacity in Japan.
In an interview with the author, the metallurgical equipment supplier Danieli Company’s engineering appraisers said that the general steel mills will consider earthquake resistance when they are established. This earthquake has led to leakage of nuclear power plants with higher earthquake resistance levels. It is believed that many steel mills cannot afford it. An accident occurs during the production process of the blast furnace and converter of a steel mill. It takes a long time to repair and may take 6-10 months. If it is rebuilt, it will take several years. In addition, if the foundation of the rolling mill changes, it will take a long time to re-commission.
According to media reports, the earthquake also severely damaged some of the ports close to the steel plant. Since Japanese steel mills rely on imported raw materials and steel exports from ports, even before the port was repaired, even if the steel mills were not damaged by the earthquake, their production could not proceed smoothly.
Judging initially, the steel mills affected by the earthquake will need to suspend production for at least six months, reduce steel production by 2.5 million tons per month, about 30% of normal production, and accumulate a minimum of 15 million tons of production.
2. Impact on the international steel market The impact of the earthquake on the international steel market was first reflected in the raw materials. The suspension of production of the three major steel plants will directly affect the demand for international coking coal and iron ore. It is expected that the demand for iron ore will increase in the next six months. It will reduce 3.5 million tons per month and reduce coking coal by 1.7 million tons.
At present, the spot iron ore market is in a downtrend channel, and the earthquake will speed up the decline, and the decline will also exceed the previous market forecast. For the spot coking coal market, the impact of flooding in Australia will also be offset by the Japanese earthquake, and prices will return to a reasonable level.
In 2010, Japan imported 4.26 million tons of steel (excluding semi-finished products), which accounted for about 6.6% of its apparent consumption. The main sources of imports were Korea, China, and Taiwan. The main varieties imported are hot coils, cold coils and galvanized sheets. Compared with exports, Japan's imports are very low, and its impact on the external market is negligible.
In 2010, Japan exported 43.4 million tons of steel, which accounted for approximately 45% of its output. It is the world’s largest steel exporter and its main export destinations are Korea, China, and other parts of Asia. The export varieties are mainly hot coil, galvanized sheet, cold coil, medium plate, welded pipe, electrical steel and stainless steel. These steels are mainly used in industries such as automobiles, home appliances and shipbuilding.
The production capacity affected by the earthquake is mainly thin plates and medium-thick plates. It is expected that the export volume of Japanese thin plates and medium-thick plates will be significantly reduced in the next six months. The supply and demand balance of these two varieties in Asia will be broken, and the market price is expected to rise accordingly. It is estimated that after two or three months, Japan's post-disaster reconstruction will begin, which is expected to boost the export of construction steel in Asian countries.
Automobile factories, shipyards and home power plants in Asia will be affected by the rise in steel prices, while large steel mills in China and South Korea may benefit from falling raw materials and rising steel prices.
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