TEX reported that Japan's Kobe Steel Limited faces a virtual shutdown of the No 2 blast furnace at the integrated steel maker’s Kakogawa works in Hyogo prefecture. Until now, the blast of the furnace has resumed, but it would be one month or so before the tapping of pig iron returns to a normal level.

As a result, it is likely that Kobelco will come under major restrictions on its steel exports, particularly on its heavy plate exports to South Korea. It was August 6th 2010 when an accident broke out in operations of the Kakogawa No 2 blast furnace. The accident was believed to have stemmed from damage to the tuyeres. The blast of the furnace resumed August 13th 2010, but a cooling phenomenon has arisen within the furnace and its virtual shutdown has followed.

Kobelco has told its customers that it will take at least one month to bring back the Kakogawa No 2 blast furnace into normal operations, during which time the company's crude steel production from the Kakogawa works is likely to decrease by an estimated 100,000 tonnes.

Accordingly, Kobelco is said to have requested relief supplies of steel semis from its alliance partner Nippon Steel Corporation. With the ensuing fall in Kakogawa crude steel production, there are prospects that Kobelco will give priority to domestic steel supplies for a while in brisk demand from industries such as autos while putting voluntary restriction on steel exports.

As a result, it follows that Kobelco's steel exports will fall off for August and September shipments whereby heavy plate exports to South Korea will stop then.

(Sourced from TEX Report Limited)