Japanese steelmaker Nisshin Steel has increased ferrite stainless steel production due to higher demand, with the product making up half of its stainless steel output in July, a company spokesman said Friday.

The stainless steelmaking plant's "run rate stays the same, but demand for chrome [ferritic] stainless steel has been brisk recently and it currently accounts for half of our stainless steel production," spokesman Mitsuhiro Murashita said.

Nisshin has been producing around 30,000-40,000 mt/month of stainless steel at its Shunan plant in Hiroshima prefecture in western Japan. The output, which represents around 70% of its record high output of 700,000 mt/year before the 2008 global financial crisis, has remained stable since October, Murashita said.

"Demand for nickel [austenitic] stainless grades, such as SUS304, is not positive," he said. "Demand for chrome stainless grades from the automotive, industrial machinery and electric machinery sectors, has been strong. As a result, chrome stainless accounts for half of our production." Another Nisshin Steel source said ferritic stainless steel demand started to pick up from the previous quarter.

SUS434 grade ferritic stainless steel, with 16-18% chrome and 0.75-2.5% molybdenum content, is used for automotive exhaust systems and malls.

Murashita declined to elaborate on the share of ferritic and austenitic stainless steel production before the boost in ferritic stainless demand, but he suggested that austenitic stainless steel output is typically larger due to its market size.

Japanese steelmakers sold 41,684 mt of ferritic stainless steel in May, compared with 208,805 mt of austenitic stainless steel, according to the latest data from the Ministry of Economy, Trade & Industry.