Bloomberg quoted Mr Hajime Bada president of JFE Steel Corporation as saying that a recovery in steel demand may take at least 3 to 5 years as a global recession slashes industry sales.
Mr Bada said that "The recession will continue for awhile. If a recovery in the US economy is delayed, it will take more than five years for a revival in steel demand. It is better than nothing, but the growth in steel demand in China is a drop in the ocean and not strong enough to have an impact on global demand."
Ministry of Economy, Trade & Industry said that mills in Japan will probably cut output by 43% in the April to June quarter from a year earlier to 17.83 million tonnes, near a four decade low.
JFE had idled a blast furnace in Okayama and another in Hiroshima in the past quarter. It said in January that production will be down by 35% in the quarter from a year earlier.
Mr Bada said that JFE Steel may not complete negotiations on iron ore price contracts for the fiscal year started April 1st 2009 until as late as July, in line with the timing of settlements last year. He added that "We want iron ore prices to go back to 2003 levels, but that’s not realistic."