JFE Steel to Idle A Blast Furnace for Cost Minimum

JFE Steel announced on Friday the firm stops no.3 blast furnace at Fukuyama area of West Japan works by end of February. The firm decided the action for better operation efficiency and cost performance under low level production while the firm keeps the plan to reduce the raw steel output by 4 million tonnes for second half year to March from first half. The firm tries to seek cost minimum operation by increasing operation rate for other furnaces through the second stoppage of furnace.

The no.3 furnace at Fukuyama with 3,223 cubic meters capacity and 2.62 million tonnes of annual production capacity, which is operated since the start of third campaign August 1994, is running for second longest period after no.3 furnace at Kurashiki area, which was stopped the operation in mid-January. The firm eyes restart of no.3 furnace at Fukuyama while the furnace could be relined without restart depending on the market.

The firm stops 2 furnaces after no.3 furnace at Kurashiki with 4,359 cubic meters of capacity and 3.25 million tonnes of annual output capacity. The total idling capacity is 5.87 million tonnes but the 4 million tonnes per half year of production cut is more than that. Even after the stoppage, the firm expects operation of other furnaces is less than full capacity and the firm can meet higher demand by increasing operation rate for the furnaces along with option for restart of Fukuyama no.3 furnace.

The firm plans to reduce the raw steel output by 1.45 million tonnes to 5.03 million tonnes in January-March from October-December and by 4 million tonnes to 11.51 million tonnes in the second half year. The production will decrease by 3.5 million tonnes to 27 million tonnes in fiscal 2008 ending March 2009.