Steel-guzzling China puts world’s auto industry on edge

Yahoo! News – Steel-guzzling China puts world’s auto industry on edge: “Nissan’s unprecedented decision to temporarily cut output due to a lack of steel shows how extreme the world’s supply problems have become as China’s huge economy consumes more and more basic materials.

China last year accounted for more than 25 percent of the world’s steel consumption and analysts believe the shortfall may not be solved until 2006 when the world’s largest metallurgical coke factory begins operating in China.

The worldwide problem has become so severe that in Europe, where many had begun to view coal mines as historical relics, German conglomerate RAG said in September it was ready to open up a domestic mine.

Nissan said Thursday it would halt assembly line production intermittently at three of its four Japanese plants from November 29 to December 8 for a total of five days, resulting in a production loss of 25,000 vehicles for Japan’s second largest auto-maker.

Nissan said its supply of steel could not keep up with its rising needs as the auto-maker races to launch six new models in Japan and four in the United States by March 2005.

The problem is not confined to Nissan. Analysts believe Toyota, Japan’s top auto-maker and the world’s number two after General Motors, and also Honda, number three in Japan, might sooner or later feel the pinch. “

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