for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Oil report

UPDATE 1-Nippon Steel to halt 2 blast furnaces to cope with falling demand

* Suspension of 2 furnaces cuts 10% output capacity

* First time since 2009 to temporarily shut more than 2 furnaces

* Also plans to shut some cokes oven (Adds details, quotes and bullet points)

TOKYO, April 8 (Reuters) - Nippon Steel Corp, Japan’s biggest steelmaker, will temporarily shut two blast furnaces in Japan later this month to cope with declining demand due to the coronavirus pandemic, it said late on Tuesday, cutting about a tenth of its capacity.

The move is the latest in a series of production cuts by various industries due to the economic effects of the coronavirus crisis.

Nippon Steel will temporarily stop a blast furnace in Kashima, eastern Japan, from mid-April and another in Wakayama, western Japan, from late-April, although it will make it possible to restart at any time, it said in a statement.

The world’s No. 3 steelmaker by crude steel output will also suspend production of some of the coke ovens at Kashima and Kimitsu, in eastern Japan, and at Wakayama, in addition to a substantial reduction of their operating rates, which has already taken place.

To help keep people employed, every office and manufacturing base will close for about two days a month starting this month.

“We have been lowering the tapping ratio of blast furnaces, extending the time between blasting among other measures to cut steel output volume, but we have decided to implement additional measures to respond immediate sharp drop in steel demand,” it said.

With 15 blast furnaces in total, Nippon Steel’s move to shut down two means a cut of an about 10% cut in its output capacity, or a reduction of about 6 million tonnes in crude steel production if they remain closed for a year, a spokeswoman said.

“We don’t know when we will resume operation of these furnaces,” she said, adding the company plans to adjust purchasing of raw materials such as iron ore and coking coal to reflect demand.

Yoshihisa Kitano, the president of Nippon Steel’s domestic rival JFE Steel, also said last month his company will need to adjust output in and after April to meet slower operations of customers such as automakers.

But the company, a unit of JFE Holdings, has not decided to suspend any blast furnace operations, a JFE Steel spokesman said on Wednesday.

In Europe, a collapse in demand from industry forced to shut down due to the coronavirus pandemic has spurred a wave of closures of steel plants. (Reporting by Yuka Obayashi; Editing by Sonya Hepinstall and Kenneth Maxwell)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up