Nippon and Sumitomo subsidiary Nippon EGalv Steel is likely to suspend operations in Penang on July 31. The company is likely to be disbanded by the end of 2020 after it stops producing electro-galvanized steel sheets (EG) in June, according to Malaysian media. Nippon Steel in March had hinted at its plans to liquidate the loss-making Malaysia subsidiary.
Once the Malaysian production ceases, Nippon would supply products manufactured at its ironworks in Chiba and Hyogo prefectures in Japan directly catering to its Malaysian customers.
The COVID-19 pandemic has dampened steel as demand with operations in downstream sectors like automotive, manufacturing, construction and infrastructure coming to a standstill.
Nippon Steel has already idled three blast furnaces in April and preponed maintenance schedules at two of its plants to July 2020 from September as reported by Davis Index.
Nippon EGalv produces steel sheets for electrical appliances.