In the next few years, the company will close a large blast furnace at its Kashima plant near Tokyo, as well as sheet and shaped mills, pipe and tube mills, galvanizing, titanium, stainless steel and other plants throughout the country.
Japanese steelmakers rarely shut down capacity, but that has changed as the COVID-19 pandemic has exacerbated a long-term decline in domestic demand as the country’s population shrinks and production moves more and more abroad. China’s huge manufacturing capacity and exports have made it difficult for Japanese steelmakers overseas.
Nippon Steel said the latest cut in production capacity, together with cuts last year, means capacity will be cut from 50 million tonnes per year to 40 million tonnes.
“Steel demand in Japan is expected to decline due to population decline (and) expansion of local production overseas by Japanese buyers,” Nippon Steel said in a statement.
“Competition in the external market is expected to intensify, mainly because demand in China, which accounts for 60% of global steel production, seems to have already peaked,” the company said.