Nippon Steel Plans 10 Million Tonne Crude Steel Capacity Cut
Nippon Steel Capacity CutNikkei

Nippon Steel Plans 10 Million Tonne Crude Steel Capacity Cut

Nippon Steels in new medium to long term management plan has announced rebuilding of domestic steel business and early recovery of profitability by

Nippon Steels in new medium to long term management plan has announced rebuilding of domestic steel business and early recovery of profitability by realizing a higher level order mix through aggressive investment in strategic products to renew and improve facilities to ensure technological strength leading to profit generation and to make the production framework streamlined and more efficient by selective concentration on certain products and facilities. After implementing the above measures, the annual domestic crude steel production capacity (simple sum of Nippon Steel and Nippon Steel Stainless Steel) will be reduced by approximately 10 million tonnes from 50 million tonnes to 40 million tonnes. Nippon Steel will reduce the number of personnel by a total of more than 20% in us and our business partner’s on-site contractors for the period from fiscal 2021 to the end of fiscal 2025. For the purpose of building an optimal production framework, Nippon Steels will implement the following specific measures

To strengthen steel plate business, in addition to the already-announced shutdown of the steel plate mill at the Nagoya Works by around the end of fiscal 2021, the steel plate mill in the East Nippon Works Kashima Area will be shut down by around the second half of fiscal 2024 and its production will be transferred to the steel plate mills in the East Nippon Works Kimitsu Area and the Kyushu Works Oita Area.

To strengthen construction products business, the shape mills in the Kimitsu Area and Kashima Area of the East Nippon Works will be shut down by around the end of fiscal 2021 and their production will be transferred to the shape mills in the Kansai Works Wakayama Area in Sakai and the Kyushu Works Yawata Area. In addition, in the East Nippon Works Kimitsu Area, the continuous casting machine, which manufactures large-shaped steel pieces, will be shut down along with the shutdown of the shape mill by around the end of fiscal 2024

In the Kansai Works Wakayama Area in Kainan, of the two seamless pipe mills, East and West, the West smalldiameter seamless pipe mill will be shut down by around the end of fiscal 2025 in order to optimize and improve the efficiency of the production framework. Nippon Steel has decided to withdraw from the UO steel large dia pipe business as there are no prospects for securing stable profit, taking into account the medium- to long-term demand outlook. As a result, the UO pipe mill in the East Nippon Works Kimitsu Area will be shut down by around the end of fiscal 2021

Along with concentrating orders into competitive production lines, the measures below will be taken in order to become more oriented toward production close to centers of demand in flat products business, in addition to the already-announced shutdown of the hot strip mill and the pickling line in the Setouchi Works Kure Area. Some of the facilities of the hot-dip galvanizing line in the East Nippon Works Kimitsu Area by around the end of fiscal 2024 and the pickling line in the Kashima Area of the same works by around the end of the first half of fiscal 2022 will be shut down, and their production will be transferred to other lines in Kimitsu, Nagoya, and elsewhere. Some of the hot-dip galvanizing lines in the Setouchi Works Hanshin Area in Sakai will be shut down and their production will be transferred to other production lines in Sakai and the Kyushu Works Yawata Area. All facilities in the Setouchi Works Hanshin Area in Osaka will be shut down and all of the flat steel sheet lines in the Kansai Works Wakayama Area will be shut down. Their production of high-carbon products will be transferred to the Setouchi Works Hanshin Area in Sakai. High carbon products will be manufactured at two bases, the Setouchi Works Hanshin Area in Sakai and Kyushu Works Yawata Area

Titanium and ultra thin special stainless steel business - To improve the efficiency of the production framework, some manufacturing facilities of special stainless steel sheet products will be shut down at the East Nippon Works in Naoetsu Area and their production will be transferred to the Yamaguchi Works in Shunan Area of Nippon Steel Stainless Steel Co Ltd by around the end of fiscal 2021. Moreover, in addition to the already-announced shutdowns of the titanium round bar manufacturing special facility in the Kansai Works Osaka Area and the titanium welded pipe manufacturing line in the Kyushu Works Oita Area based Hikari Pipe & Tube, the titanium raw material plant in the Kansai Works Osaka Area will be shut down.

Nippon Steel Stainless Steel Corporation - To increase the efficiency of the production framework, the cold-rolling mill and the annealing line of Nippon Steel Stainless Steel’s Kinuura Works will be shut down and the production will be transferred to its Yamaguchi Works. This will result in the shutdown of all production facilities of the Kinuura Works, including the shutdown of its hot strip mill which was announced in 2020. The electric furnace in the Yamaguchi Works and some of the cold-rolling and annealing facilities at the Yamaguchi Works and the Kashima Works will also be shut down.

Measures to streamline upstream facilities - The following measures will be implemented in addition to the already-announced shutdown of all upstream facilities (2 blast furnaces, sintering, and steelmaking) in the Setouchi Works Kure Area by around the end of fiscal 2024and upstream facilities (1 blast furnace and related facilities) in the Kansai Works Wakayama Area By around the end of fiscal 2021. Taking into consideration the upstream facility balance after the shutdown of the steel plate mill and shape mill in the East Nippon Works Kashima Area, as well as the area’s integrated production and shipping capacity, costs, and other factors, the No 3 blast furnace and related facilities will be shut down. In the East Nippon Works Kimitsu Area, the continuous casting machine that manufactures large-shaped steel pieces will also be shut down along with the shutdown of its shape mill. Based on the immediate trends in supply and demand and other factors, and in order to improve the efficiency of the production framework at an earlier stage, among the upstream facilities of the Kansai Works Wakayama Area which were previously announced, the shutdown of the No 1 blast furnace, No 5 coke ovens, and No. 5-1 sintering machine will be moved up one year ahead of the original schedule from around the end of the first half of fiscal 2022 to around the end of the first half of fiscal 2021. The shutdown schedule for the No. 4 coke oven and No. 3 casting machine -1 strand remains unchanged and will continue until around the first half of fiscal 2022, as announced on Feb. 7, 2020.

Strategic investment in a hot strip mill at the Nagoya Works – Nippon Steel intend to dramatically strengthen production capability of ultra high tensile strength steel sheets2 at the Nagoya Works, which is our center for the manufacture of automobile steel sheets. We have therefore decided to make a strategic investment in building a next-generation hot strip mill. After the next-generation hot strip mill is launched, the existing hot strip mill will be shut down.

Strengthening production framework of high grade electrical steel sheets – Nippon Steel decided to adopt measures to improve the capacity and quality of electrical steel sheets in the Setouchi Works Hirohata Area and the Kyushu Works Yawata Area in November 2020. Nippon Steel is currently working on measures to realize this by the first half of fiscal 2023. In addition, Nippon Steel has decided to swiftly respond to market demand for these sheets by improving the production capacity in the Setouchi Works Hirohata Area.

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