Nippon Steel to cut another 10% of capacity as pandemic hits demand
Posted on 08 March 2021
Japan’s biggest steelmaker Nippon Steel Corp 5401.T said on Friday it will reduce capacity by a further 10%, having already shut down 10% last year, due to falling domestic demand and intensifying competition from China.
The company will close a large blast furnace at its Kashima plant near Tokyo, along with plate and shape mills, piping and tubing mills, galvanizing, titanium, stainless steel and other units around the country in the next few years.
Japanese steel makers have rarely shut down capacity but that changed as the COVID-19 pandemic has added to a long term decline in domestic demand as the country’s population falls and more manufacturing shifts overseas. China’s huge capacity and exports have made it tough for Japanese steel makers overseas.
Nippon Steel said the latest cut in capacity, taken together with cuts last year mean capacity will be reduced from 50 million tonnes per year to 40 million tonnes.
“Steel demand in Japan is expected to decrease due to its declining population (and) the expansion of overseas local production by Japanese customers,” Nippon Steel said in a statement.
“Competition in the overseas market is expected to intensify, mainly as demand in China, which represents 60% of the world’s steel production, seems to have already peaked,” the company said.Source : Reuters