Nippon Steel has decided to scale up production at Nagoya works with the relining of blast furnace 3. Increased competition in the overseas markets and slump in Japan’s steel demand has forced the company to investment in upgrades.
The Nagoya Works is Nippon’s integrated manufacturing hub for auto steel sheets. The plant has the ability to produce customised high-grade steel sheets. It also supplies high-grade semis to other steelworks. Post relining work, advanced IT and other technological upgrades will be adopted for the blast furnace 3 to increase productivity and stabilize production.
The current capacity of blast furnace 3 is 4,300 m3 and the relining period is until the first half of 2022. Nippon Steel will invest approximately $450mn for the upgrade.
Nippon’s decision to take up maintenance work at Nagoya is in line with its restructuring plan announced in February. The relining plan comes at a time when Japan’s crude steel output is charting new lows. Slump in Japan’s steel demand began in H2 2019 and has exacerbated by the COVID-19 pandemic. The country’s automotive and machinery sectors have been severely impacted by the economic slowdown in Japan, whilst construction sector has dipped slightly. In April, Japan’s crude steel production fell 23pc to 6.61mt from 8.64mt in April 2019.