Nippon Steel to Idle A Blast Furnace for Additional Production Cut

Nippon Steel announced on Thursday the firm expands the raw steel production cut to historical 4.2 million tonnes in second half of fiscal 2008 ending March 2009 compared with the first half year. The firm accelerates the blow off of no.1 blast furnace at Oita works one month ahead of the original schedule for relining and idles no.2 blast furnace at Kimitsu works temporally. The firm also idles some coke ovens at Kimitsu, Nagoya, Yawata and Oita with hot banking status. The firm tries to improve the supply balance through the major production cut under slowing steel demand when the users of automakers and construction machinery makers expand the production cut again and again.

The firm decided blow off no.1 furnace with 4,884 cubic meters of capacity at Oita on February 1 while the firm planned the blow off on March 7 for scheduled relining. The firm temporally stops the operation of no.2 blast furnace with 3,273 cubic meters of capacity at Kimitsu in late February to early March into banking status, which is standby position for restart. The firm also stops some of coke ovens by shutting the door and keeping the temperature keeping the hot banking status for restart.

The firm will restart no.1 furnace at Oita in mid-May after the relining. However, the firm could delay the schedule depending on the demand condition. The firm will decide when the firm restarts no.2 furnace at Kimitsu depending on the demand condition in first half year of fiscal 2009.

Nippon Steel planned 33 million tonnes of raw steel output in fiscal 2008 originally. However, when financial crisis impacts on the industrial activity, the firm announced in October 1 million tonnes of production cut in the second half year and expanded the cut to 2 million tonnes in November. The firm revised the production plan again when the actual steel demand decreases and the users and distributors try to reduce the inventory.

The firm’s raw steel production was 7.37 million tonnes in October-December, which was 1 million tonnes or 12% lower than same period of 2007. The production will decrease to the 5 million tonnes in January-March, which is 3.5 million tonnes or 41% lower than same period of 2008 and the lowest quarterly level in the history. The production is 12.3 million tonnes in the second half year, which is 4.6 million tonnes or 27% lower than same period of previous year, and is 28.9 million tonnes in fiscal 2008, which is 4.2 million tonnes or 13% lower than fiscal 2007.