Posted on 13 Aug 2020
JFE Holdings, Japan’s second-biggest steelmaker, on Wednesday warned of a net loss of 100 billion yen ($937 million) in the year to March 2021, its second consecutive year of loss, as the COVID-19 pandemic choked off steel demand.
JFE Holdings President Koji Kakigi said the company may speed up restructuring steps unveiled in March, including the closure of a blast furnace in its Keihin plant, near Tokyo, to cope with slumping demand.
JFE said in March it would cut steel capacity by 13% by shutting a blast furnace by March 2024.
“We plan to accelerate our restructuring steps, with an assumption that the coronavirus impact will stay for a while,” Kakigi said, citing an unprecedentedly harsh business situation.
Japanese steelmakers were suffering from a weak economy before the coronavirus crisis. They were also affected by U.S.-Sino trade tensions and rising costs of raw materials like iron ore as top producer China boosted steel output to meet infrastructure demand.
In May, JFE booked a record net loss of 197.7 billion yen for the year ended in March.
For the April-June quarter, JFE posted a net loss of 39.2 billion yen as its crude steel output tanked to 4.79 million tonnes on a parent basis from 7 million tonnes a year earlier as it temporarily suspended two blast furnaces in western Japan.
Kakigi said it may restart one of the two furnaces in October as it expects a pick-up in demand from automakers.
Still, JFE may need to decide additional restructuring measures if it could not boost its annual steel output to around 24 million tonnes quickly, Kakigi said.
Source:Reuters
