Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Nippon Steel announced it’s undertaking structural and management reform measures over the next three years.


The restructuring is part of a strategy to grow Nippon’s share in an increasingly competitive global steel market through 2020 and beyond, and to manage shrinking steel demand. The restructuring initiatives include shutting down high-cost facilities and integrating their production with other lower-cost facilities, making selective investments to improve productivity, and strengthening the steelmaker’s competitiveness.


The company began its restructuring initiatives in 2019 with the closure of a UO pipe mill at its Kashima works. In 2020, it plans to shut down upstream facilities at its Yawata Works, a tinplate mill at its Hirohata Works, and the annealing and processing line, electro galvanizing line, and an aluminizing line at its Nisshin Sakai Works. The company also plans to streamline its stainless-steel business by shutting down the hot strip mill and precision products line at its Nippon Steel Stainless Kinuura Works this year.


In 2022, Nippon Steel will shut down a sintering machine, two coke ovens, and part of its No. 3 continuous caster at Wakayama Works, a steel plate mill at Nagoya Works, and the titanium bar lines at its Osaka and Oita Works.


The Japanese steelmaker plans to reduce the number of blast furnaces (BFs) from 15 at present to 11 by the end of 2023—including one BF at its Nisshin Kure Works and two BFs at its Wakayama Works. Additionally, the company will completely shut down the Nisshin Kure Works facility by 2023. At its Hirohata Works, Nippon will shut down a melting furnace and install an electric arc furnace by 2023.


Nippon announced these changes after posting a net loss of 440bn yen ($4bn) for 2019 on the back of low domestic consumption, increasing downside risks in the steel sector, and increased global competition, especially from the Chinese steel industry.

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