Five years ago, Carlos Ghosn, the pioneering chief executive of Nissan, demanded that the carmaker's main steel suppliers either cut their prices or risk losing its business. Nippon Steel obliged, triggering a price war. Its rivals, NKK and Kawasaki Steel, have since merged to form JFE.

Today, the tables have turned. Faced with increasing demand amid tightening supply, the Japanese steelmakers now have the upper hand when it comes to negotiating prices and supply with the carmakers. In fiscal 2003, the automobile industry accounted for 50 per cent of Japan's speciality steel demand, according to UBS.