Japan Metal Daily: JFE Steel, Japan’s second largest steel producer, has announced a temporary shutdown of one blast furnace in response to a sharper than expected decline in steel demand in Japan and overseas. JFE Steel declared it will suspend a blast furnace at the Kurashiki plant by mid-May, reducing its crude steel production capacity by 4 million tonnes (mnt) per year, which accounts for 15% of its total output.
This suspension, implemented using a process called banking, marks JFE’s first such move since 2020, when steel demand declined sharply due to the COVID-19 pandemic. As a result, the company’s active blast furnaces will temporarily decrease from seven to six.
JFE’s crude steel production capacity stands at 26 mnt annually, but due to weak demand in key sectors like automotive, construction, and civil engineering, actual production is projected to be only 22 mnt in FY’24. The production reduction is intended to adjust supply in response to market conditions.
Previously, JFE attempted to adjust production by lowering the production ratio of its blast furnaces. However, technical and cost constraints have now required a more significant reduction. Unlike JFE, other major Japanese steel producers, such as Japan Steel and Kobe Steel, have not announced similar measures at this time.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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