It is reported that JFE Holdings Inc may boost plate production to meet demand from shipbuilders that have vessel orders backlogged into 2012.

The Nikkei report said that JFE, Japan's biggest producer of shipbuilding steel will raise production to 6.5 million tonnes a year by fiscal 2011.

The Nikkei reported that JFE may increase output of steel plate under the next mid term plan. But a decision hasn't been made yet. JFE will spend about JPY 30 billion (USD 280 million) to boost output 10% in three years.

It said that increasing demand for plate has allowed Japanese mills to raise prices for the material, helping offset a surge of as much as 97% this fiscal year for iron ore and a tripling of coking coal prices.

JFE and bigger rival, Nippon Steel Corp. are making more steel as economic growth in China drives demand for ships to deliver commodities including iron ore and oil. Trade between Asia and South America rose more than 20% in each of the past five years and growth will remain in the double digits in the coming five years.

Nippon Steel in July last year said it would spend JPY 20 billion to expand annual output of steel used in ships by 11% to meet rising demand for oil and liquefied natural gas tankers. The expansion would raise output to 600,000 tonnes a year at its Oita mill on Japan's southernmost main island of Kyushu.