It is reported that Nippon Iron and Steel has determined the policy of shutting down a blast furnace at a steel plant in Luku City, Ibaraki Prefecture. It has been decided to shut down three blast furnaces in Hiroshima Prefecture, and the company's domestic production capacity in Japan will be about 20% less than at present. Although demand from cars is increasing, there is still excess capacity in Japan. The Japanese government has promoted the decarbonization policy, and the blast furnace will emit a large amount of carbon dioxide, so Nippon iron-making equipment will be cut back.
Nippon Steel has 14 blast furnaces in Japan and 2 blast furnaces in the Kagoshima area of East Japan. One of them will be closed within a few years. Some analysts believe that the company will also promote the integration and shutdown of rolling and other processing lines at the same time, and discuss the relocation of some employees.
The background of shutting down the blast furnace is the sluggish operation of domestic steel mills in Japan. Since the autumn of 2020, automobile production has recovered and steel purchases are being strengthened, but steel mills have not been operating at full capacity. According to the estimates of the Organization for Economic Cooperation and Development ((OECD)), Japan's crude steel production capacity by 2019 is 130 million tons, but the actual production is only 99 million tons, which is in a state of about 30% surplus. Affected by the novel coronavirus epidemic, Japan's crude steel production dropped to 83.19 million tons in 2020.
