Japan: JFE Steel to Halt One of its Blast Furnaces Amid Sluggish Demand
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JFE Steel, in the purview of the changing fundamentals in Japanese domestic market and international market has announced that it will continue to work on operational configuration of 7 blast furnaces (BF) down from 8 BFs. Also company plans to review production operations by focusing resources more strategically on key products.
Expected effects-
-- The discontinuation of the 1 BF shall reduce the production by 4 MnT (about 13%), which is poised to enhance the overall competitiveness of its blast?furnace integrated steelworks and maximize manufacturing capacity at each steelworks and other works. This, in turn, will support the company's sales and product strategies.
-- By shutting down the selected facilities there would be a reduction in fixed costs and other expenditures. Also, the expenditure on the renewal of aging equipment will be reduced by an estimated JPY 200 billion over the next 10 years.
-- The company is expecting to recognize the impairment losses of JPY130 billion from Chiba district operations and JPY 90 billion from Keihin district operations.
-- Invest strategically in its domestic steelworks and other works, including West Japan Works, and the refitting of the No. 6 blast furnace in Chiba.
-- The previous efforts of constructing the No. 3 sintering machine and No. 3 coke oven in Fukuyama, constructing the No. 7 continuous casting machine and refitting the No. 4 blast furnace in Kurashiki, and expanding electrical steel sheet manufacturing facilities, shall also be pursued.
-- To develop new growth opportunities and boost the current overseas earnings bases the company shall strengthen the value of alliance partners and operating companies in the growing overseas markets.
--JFE Steel will make every effort to strengthen the competitiveness of its domestic manufacturing bases as well as expand the earnings power of its overseas businesses to further enhance the company's corporate value over the long term.
Main Facilities Scheduled for Shutdown
-- The company has listed down further shutdown plans for upcoming years for separate works.
| District | Facility | Details | Original Startup | Shutdown Timing |
|
Keihin | No. 2 Blast Furnace | Furnace volume: 5,000m3 | March 2004 |
By FY2023 |
| Shaft Furnace | Furnace volume: 172m3 | August 2008 | ||
| No. 1 Sintering Machine | Grate area: 450m2 | October 1976 | ||
| No. 1 Coke Oven | 124 chambers | November 1976 | ||
| No. 2 Coke Oven | 74 chambers | July 1979 | ||
| Raw material facilities | Facilities for loading, inventory intake/ distribution, etc. | |||
| Converters | 2 x 328t/ch | November 1976 | ||
| No1. Electric Arc Furnace | 1 x 50t/ch | April 1979 | ||
| No. 1 Continuous Casting Machine | 2?strand (slab) | November 1976 | ||
| No. 3 Continuous Casting Machine | 2?strand (slab) | March 1979 | ||
| No. 5 Continuous Casting Machine | 6?strand (billet) | December 1982 | ||
| Hot Rolling Facilities (excl. pickling line and skinpass mill) | Thickness: 1.2- 25.4mm Width: 600-2,300mm | March 1979 | ||
| *No. 1 Tandem Cold Mill | Thickness: 0.12- 1.65mm Width: 600-1,305mm | April 1961 |
Within FY2019 | |
| *No. 3 CGL | Thickness: 0.27- 2.3mm Width: 610-1,250mm | April 1983 | ||
|
Chiba | *No. 2 Tandem Mill | Thickness: 0.1-0.6mm Width: 600-1,100mm | May 1963 | By FY2022 |
| *No. 2 CAL | Thickness: 0.17- 0.6mm Width: 600-1,250mm | July 1980 | Within FY2019 | |
| *No. 4 CAL | Thickness: 0.15- 0.4mm Width: 600-1,067mm | March 1990 |
By FY2022 | |
| *TFL | Thickness: 0.1-0.6mm Width: 457-1,067mm | June 1983 | ||
| *No. 2 ETL | Thickness: 0.1-0.6mm Width:600-1,067mm | November 1972 | Within FY2019 |
Source: Company Data, SteelMint Research
