Japan steel makers lean on nuclear power

Japan's steel makers, feeling the effects of a strong yen, urged the early restart of nuclear power plants.

The country's steel sector was the biggest loser among Asian peers in the quarter to December as the strong yen squeezed exports, opening the door for cheaper imports, pressuring prices in the domestic market. Steel imports jumped 22 percent in 2011 to a 13-year high.

They fear that potential power cuts and more costly electricity will further squeeze dry. 

"The smooth restart of nuclear power plants after safety checks is very important for Japanese manufacturers," said Eiji Hayashida, chairman of the Japan Iron and Steel Federation.

He fears that utilities other than Tepco will also be forced to raise electricity charges if they have to turn to gas-fired plants.

"Unstable power supply and high power costs will drive more Japanese manufacturers abroad," said Hayashida, who is also president of JFE Steel Corp, the world's fifth-biggest steelmaker.

The industry body said last month that Tepco's planned price hikes would sap the profits of the struggling steel sector by 20 billion yen a year, with the electric furnace industry, which melts scrap to produce construction steel, hit particularly hard.

Big businesses have reacted furiously to Tepco's plans to raise charges but had refrained from calling for the restart of reactors, wary of an angry response from a public worried about nuclear safety.

The last two of Japan's 54 reactors still operating are due to close by late April for routine checks, but the government still remains unclear about conditions of restarts after they came up with new guidelines of safety checks.

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