Sumitomo Metals Starts No.1 Blast Furnace Operation as Scheduled

Sumitomo Metal Industries will start the operation of no.1 blast furnace in Wakayama iron works in mid July as scheduled. The firm stops the operation of no.4 blast furnace and switches over to no.1 blast furnace on July 17. The firm continues output reduction in Wakayama iron works, Kashima iron works and Sumitomo Metal Kokura, the subsidiary of Sumitomo Metals, due to slow steel demand. However, the firm decided to start no.1 blast furnace and prepare for the demand recovery. Wakayama iron works is expected to keep stable operation with steady demand for seamless steel tubes and slabs from China Steel, Taiwanese steel maker.

Sumitomo Metals is refreshing upstream productive facilities in Wakayama iron works with investment of 160 billion yen. The firm constructs no.1 blast furnace and no.1 coke furnace, and expands sinter equipment and coke dry quenching equipment. Expansion of sinter equipment was completed in January 2009 while construction of no.1 coke furnace is scheduled to be finished in June 2009.

Total expenditure for no.1 blast furnace is 51 billion yen. Sumitomo Metals started the construction in November 2006, finished outer shell installation in June 2008 and building-up of inside bricks in March 2009 as scheduled. The hot metal output capacity is 7,500 tonnes per day, higher by around 40% than no.4 blast furnace. However, the firm will maintain the output as low as the current demand level for a while.

Sumitomo Metal’s crude steel output totaled 12.87 million tonnes per year in fiscal 2008 (Apr08-Mar09), which decreased by 5.5% from fiscal 2007. The quarterly output was over 3.5 million tonnes for April-June and July-September while decreased to 3.36 million tonnes for October-December and 2.48 million tonnes for January-March.

Monthly crude steel output was 463,000 tonnes in Kashima iron works in March, down by 34% year-on-year, 294,000 tonnes in Wakayama iron works, down by 19%, and 72,000 tonnes in Sumitomo Metal Kokura, down by 39%. Kashima iron works and Sumitomo Metal Kokura largely reduced the output. The main product of Kashima iron works is steel sheet for automobiles. Sumitomo Metal Kokura’s main products are special steel bar and wire rod for automobiles.

Sumitomo Metals has decided to construct no.2 blast furnace and enhance continuous casting equipment with investment of 115 billion yen in Wakayama iron works.