Nippon Steel, JFE Steel Boosting Tinplate Steel Output

Factiva: "Nippon Steel Corp. (5401) and JFE Steel Corp. are each taking steps to boost production capacity for tinplate steel, used to make cans for beverages and canned foods."

Nippon Steel is investing an estimated 3-4 billion yen to raise its annual domestic output capacity by about 10% to 1.3 million tons this year. The company makes tinplate steel at three factories in Japan, with a focus on material for the manufacture of food cans. It plans to upgrade the equipment used to plate tin onto steel sheet and in doing so increase its overall production capacity at the three facilities by some 100,000 to 150,000 tons a year.

JFE Steel is building a new line for tinplate base material at the Fukuyama arm of its West Japan Works in Hiroshima Prefecture. This line will have an annual output capacity of 480,000 tons, and when it starts up the company will end operations on an existing line, which has a capacity of 264,000 tons. The JFE Holdings Inc. (5411) unit had originally planned to start up the new line in February or March of 2011, later bringing that date forward to January, but has now decided to start this autumn.

Tinplate steel is made from steel sheet just 0.18mm to 0.25mm thick, and the plating must not crack when the metal is shaped into cylinders for cans. Only four companies in Asia have the necessary expertise: Nippon Steel; JFE Steel; South Korean firm Pohang Iron & Steel Co., or Posco; and Chinese firm Baosteel Group Corp.

The Asian market for tinplate steel is growing at an annual 4-5% clip, with continued expansion in demand expected as economic growth lifts incomes and changes dietary lifestyles to include greater consumption of canned foods, carbonated beverages and canned coffees.