Nippon Steel Corp. is considering idling two blast furnaces at a subsidiary in Hiroshima Prefecture, according to sources familiar with the matter.
With the move, Japan’s biggest steel-maker by output would be likely to push down its domestic crude steel production by about 10 percent as it is already looking to halt another furnace in the city of Kitakyushu.
The reports come as Nippon Steel suffers weakening profits, with slumping steel prices in Asia denting its export margins and after typhoons and fires interrupted production by causing a series of suspensions at local facilities.
The two furnaces said to be subject to review, both sited at the steelworks in the city of Kure operated by Nippon Steel Nisshin Co.’s Kure Works, produced a combined 2.73 million tons of crude steel in fiscal 2018, which ended in March last year. Nippon Steel is set to absorb the unit on April 1.
One of the two Kure blast furnaces was already scheduled to be halted in March 2024.
In December, the parent company announced plans to temporarily stop operations at that furnace in mid-February and concentrate production at the other furnace at the Kure Works, keeping it ready for a return to operational use when necessary. But the company is now examining the option of idling both furnaces in view of the recent supply-demand balance, sources said Thursday.
Nippon Steel halted one of three blast furnaces at Kimitsu Works in the city of Kimitsu, Chiba Prefecture, in March 2016. It is set to stop one blast furnace in the Kokura area, at Yawata Works in the city of Kitakyushu, in March 2021.
Once operations at the two Kure furnaces and the Kokura area furnace are stopped, crude steel production by Nippon Steel group’s domestic blast furnaces will fall by about a tenth. The Kokura furnace produced 1.18 million tons of crude steel in fiscal 2018.
In April, Nippon Steel plans to consolidate its 16 steelworks in Japan, including those run by Nippon Steel Nisshin as well as other facilities, as part of moves to streamline the group’s operations.