That has in turn raised the price pressure on refiners who provide the steel sector with the zinc for galvanised steel sheets, mainly used in the automobile and construction sectors. "It is possible that some domestic zinc refiners may stop producing zinc," said Mr Kazuhiro Harada, a senior analyst an Credit Suisse Trust and Banking Co Ltd. "It will be difficult for the zinc sector to keep going as it is." In the latest sign of steel sector consolidation, NKK Corpand Kawasaki Steel Corp - are believed to be considering a merger to boost efficiency and help them compete with Japan's biggest steelmaker, Nippon Steel Corp, analysts said. If the two firms - Japan's second-and third-largest steelmakers - merge, it would give the steel sector increased buying power over the zinc refiners, who have yet to embark on any serious restructuring. A senior industry source said that local zinc refiners also fear the emergence of competition from rival Korea Zinc Co Ltd after Nippon Steel and Pohang Iron and Steel Corp(Posco), the world's two biggest steelmakers, agreed to expand their business alliance.