India finished steel exports to Japan likely to rise

India steel exports to Japan likely to rise. Exports of finished steel to Japan will rise in the coming months as the Asian nation rebuilds after the 9.0 magnitude earthquake, two senior Indian steel company executives said Tuesday. Economists estimate damages from the earthquake could run as high as 10 trillion yen and knock three percentage points off Japan's gross domestic product growth this year. "It would be important to note that a lot of the wooden houses and structures traditionally found on Japan's coastline may now be replaced with buildings made of steel and cement, as they would be better able to withstand the impact of a tsunami," Malay Mukherjee, chief executive of Essar Steel Ltd., said on the sidelines of an industry event. He said the quake could lead to a reduction in steel exports from Japan. "It's difficult to gauge the impact on prices of steel and raw materials right now. However, a rise in demand is very likely," he said, adding that another major source of worry for Japanese steel mills could be the availability of electricity after the earthquake. A growing list of companies in a range of Japan's industries, from consumer electronics to steel makers and retail store operators, were suspending parts of their operations affected by the earthquake, while preparing to cope with planned power outages. Several metal and building materials stocks around Asia edged higher Tuesday on hopes for reconstruction opportunities in Japan, while coal shares climbed and uranium miners plunged on worries about the prospects for nuclear power projects. State-run Steel Authority of India Ltd.'s chairman, C.S. Verma, told reporters that Indian steel companies may export more finished steel to Japan when it starts rebuilding efforts. Mr. Verma also said he expects international coking coal prices to decline in the near-term as Japanese steel mills are likely to slow down purchases. "We expect Japan to import less coking coal for the next two months," he said, adding that Japan imports between 9 million and 10 million metric tons of the vital steel-making material each month. Indian iron ore miners also said that spot prices of the ore, which have slipped over the past month due to low demand from China, are likely to slip further as Japanese steel mills slow down immediate purchases while they recover from the earthquake. "In the short-term, demand for iron ore from Japan may decline as the entire machinery there will have to stabilize first," said R.K. Sharma, secretary general of the Federation of Indian Mineral Industries. "But once the country goes to rebuild its infrastructure, demand should actually bolster." Japan bought 5.87 million tons of iron ore from India in the fiscal year ended March 31, 2010, or as much as 5% of exports by the world's third-largest supplier. In the past month, the export price of ore with 58% iron has dropped to about $140 a metric ton, including cost and freight, from $168 a ton in February, while the price of ore with 50% iron has halved to $40 a ton.