Nippon Steel, Japan’s largest integrated mill, has been forced to halt operations on a cold-rolling mill at its Nagoya Works in central Japan after a fire broke out on the mill early on December 7, a company official confirmed. Market observers told Mysteel Global the incident could impact automotive sheet supply, just when domestic demand is active.
The Nagoya Works is Nippon Steel’s key auto-sheet production base located in the heartland of Japan’s biggest automaker, Toyota Motor, and the sprawling network of Toyota components suppliers scattered throughout Aichi prefecture and the wider Central Japan.
The CR mill fire occurred at around 0:30 on Monday morning in a facility used for processing used lubricant and required about three hours to extinguish. No injuries were reported but Nippon Steel suspended all operations on the mill. “The cause of the fire is still under investigation,” the official explained. “As we haven’t completed assessing the damage, we don’t know how long it will take to repair the equipment and when operations might restart.”
The Nagoya plant hosts two CR mills and the other CR mill has been operating, the official shared. Nippon Steel refuses to reveal the capacity of the CR mills but Mysteel Global believes the combined total is around 3 million tonnes/year. The official said they would study raising throughput on the works’ other CR mill and see if cold mills at other works have scope to supply to Nagoya.
A trader in Nagoya expressed concern about auto sheet supply because vehicle production is one of the few steel-demand areas showing an improvement currently. Should auto sheet supply from Nagoya decline, it may interrupt production activities at other automakers – not just Toyota and its subsidiaries Hino and Daihatsu. He wondered too whether other Nippon Steel works would be able the supply the shortfall at Nagoya.
“Nippon Steel had just restarted two blast furnaces to cope with the rising demand from the auto sector, so we’re not worried about any shortage of raw steel. But I really wonder if other works can produce the same kinds of products to support Nagoya, because some sheets must be approved with a specified plant name such as ‘Nagoya’,” he told Mysteel Global. “I suspect that the Nagoya works has more of these kinds of products as well,” he added.
Late last month, Nippon Steel restarted blast furnaces at its Muroran Works in Hokkaido and at Kimitsu near Tokyo, as reported.
The steelmaker never reveals the production details of each plant but the Nagoya Works produced 5.81 million tonnes of crude steel during the year ended March 2020. Over half of the finished products made at the works supply auto-related customers, according to sources.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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