Nippon Steel Corp plans to suspend operations at a blast furnace in eastern Japan in the coming years as part of efforts to improve profitability amid declining domestic demand, sources close to the matter said.
Japan’s largest steelmaker currently operates 14 blast furnaces across the country. One year ago, it decided to stop two blast furnaces in Kure, Hiroshima Prefecture, by September and another in the western city of Wakayama, by September 2022.
The total number of Nippon Steel’s operational blast furnaces will be reduced to 10 after it halts one of the two blast furnaces in Kashima, northeast of Tokyo.
The steelmaker is likely to consider transferring some of its 3,000 workers at the Kashima plant to other production bases.
Japanese steelmakers have faced an uphill battle after demand from automakers fell sharply last year in the wake of the coronavirus pandemic.
Although new auto sales have been picking up recently, Nippon Steel was forced to take additional restructuring measures as demand for steel products is expected to remain below pre-pandemic levels, according to the sources.
Nippon Steel merged with Sumitomo Metal Industries Ltd. in 2012 and changed to its current name from Nippon Steel & Sumitomo Metal Corp in April 2019. It logged a net loss of 431.51 billion yen ($4.1 billion), on sales of 5.92 trillion yen in fiscal 2019.