Japan's Toyota Motor Corporation plans to ease up its reduction of vehicle production in August, cutting by only about 3%, as opposed to 10% in July and 40% in June, the carmaker said July 21.
Additionally no production lines will be suspended in August compared to six lines in July and 25 lines in June. Toyota runs 28 lines at 15 plants across Japan.
"Toyota estimates that strong global demand for new vehicles will bring domestic production back to almost the same as the initial plan in August. This recovery trend is expected to continue in the future," the Japanese car giant said.
The 3% dip in August production will come from No. 2 production line operated by Gifu Auto Body, which will cut operations to one shift from two shifts over May to October
Also, three lines will undergo holiday shifts in August, totaling six days, of which two lines are operated by Toyota Motor Kyushu and one by Daihatsu Motor in Kyoto.
In May, Toyota's total production including subsidiary brands Lexus, Daihatsu and Hino, plunged 56% from a year earlier, to only 164,858 units. May's output also marked a contraction of 41% from April, and its year-to-date total of 1.53 million units was 22% lower than a year ago.
Meanwhile, with better downstream manufacturing days to come, scrap traders within Japan were feeling elated as this would lead to better generation of prompt scrap, and also better flat steel demand for domestic steelmakers.
“We used to collect a few thousand tons of prompt scrap a week from Toyota and Nissan factories, but that number has since Q2 fallen to only just about 100 mt,” a scrap trader there said. “If vehicle makers ramp up production again it would give better support to the whole steel demand and scrap supply cycle.”
-- Clement Choo, Samuel Chin
Source : Steel Business Briefing
