Nippon Steel Corp. will reduce steel output due to expected falls in demand in the wake of the flooding in Thailand and the stagnating global economy.
The steelmaker said Wednesday output is expected to be cut by roughly 250,000 tons via a sooner-than-planned shutdown of a furnace at its plant in Kimitsu, Chiba Prefecture, on Dec. 1 for renovation.
The leading Japanese steel producer's move is likely to prompt rivals to follow suit, industry watchers say.
Nippon Steel produces around 30 million tons of crude steel annually, meaning the cut would amount to slightly less than 1 percent of annual output.
The company said if demand revives more quickly than expected, it can increase output by raising the capacity utilization at its other furnaces.
The furnace at the Kimitsu plant is scheduled to undergo maintenance and capacity expansion work between mid-January and mid-May.
The move comes as domestic crude steel output has been recovering from a drop following the March earthquake and tsunami.
A decline in Japan's steel output is expected to be worse in the second half of the current business year ending next March than originally projected because of the impact the flooding in Thailand has had on automakers and due to sluggish overseas steel demand.