Nippon Steel prepones suspension of operations at two plants from July 2020 to soon as idling preparations are ready in response to slumping demand for steel products in Japan and overseas, according to a company release.

 

The company has preponed the innovation work at No. 2 blast furnace of Hokkai Iron & Coke Corporation with pig iron facilities in the Muroran Works from early July as soon as preparations for temporary shutdown are completed. The banking process of no. 2 blast furnace at Kyushu Works’ Yawata area will also start from early July instead of September. 

 

Nippon Steel has already shut three blast furnaces in April as reported by Davis Index. The company expects demand for steel to remain sluggish due to the economic impact of COVID-19. Nippon expects a decrease in production and shipment volumes, an uptick in variable cost and a decline in the price of steel product. 

 

In Q1, Nippon expects an operation rate of 60pc with the reduction in production and the same level to continue into Q2 as well. 

 

Nippon Steel posted a net loss of JPY426bn ($4bn) for the fiscal year 2019 as against a profit of JPY257.6bn ($2.4bn). Net sales were down by 7pc in 2019 from the prior year. The company’s revenues were impacted by reduction in shipment volumes, lower steel prices and increase raw material costs along with impairment losses on its operating assets.

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