Raw Material Demand in the Japanese Steel Industry

In iron production, It is general procedure for ore which contains a large percentage of iron to be melted at high temperatures in order to remove impurities and oxygen. The raw materials which are used to make iron include: iron ore or steel scrap, coking coal, limestone, and small amounts of supplementary materials such as manganese and chromium ores.

In this paper, the three basic raw materials, Iron ore, scrap, and coking coal, are discussed.

After looking at the relationship between iron production and raw materials in Chapter 1, Chapter 2 explains the supply and demand structure of the iron ore, scrap and coking coal markets and recent trends within each market. The volume of iron ore consumption has been increasing rapidly since the 1960s. After the oil shock, however, it has remained low because of decreased demand for iron and steel. Scrap supply is increasing in general, particularly from domestic sources. The supply and demand trends in coking coal are almost the same as in iron ore.

Chapter 3 attempts to examine the future levels of supply and demand for the materials used to produce iron and steel. More specifically, the supply and demand levels for these materials are projected for the fiscal year 1995. Assuming that the method used for making iron, by using converter and electric furnaces, does not change, the level of demand for the three raw materials used for iron steel production will be: iron and steel ore, 98,520,000 tons; scrap, 30,180,000 tons; and coking coal, 63,520,000 tons. The import share by source of supply in these materials will probably not change significantly over the medium term. However, if steel firms gain access to relatively cheap and stable sources of supply as a result of efforts such as developing new sources of coal, procurement from these sources will in the long term reduce the amount of coking coal purchased from other suppliers.