Japan: Nippon Steel plans to start operating new galvanizing line in Jan-Mar

Nippon Steel, Japan's largest integrated mill, plans to start commercial production on a new continuous hot-dip galvanizing line (CGL) at the Kimitsu area of its East Nippon Works in Chiba prefecture sometime during January-March next year, a company official confirmed on Thursday. The start-up, delayed for over six months, is to lift supplies of ultra-high-tensile steel sheets for Japan's recovering automotive manufacturing sector.

The new CGL, called No.6 and with a design capacity of 33,000 tonnes/month, will be able to produce both hot-dipped galvanized steel (GI) sheets and hot-dipped galvannealed steel sheets (GA). Nippon Steel had initially planned to start operating the line during this year's July-September quarter but postponed the start because of uncertainties facing the Japanese economy caused by the COVID-19 outbreak, the company official explained.

"But steel demand from the auto sector has been improving quickly so we decided to start commercial operations on the new CGL," she noted. "The sheet will be mainly used for automobile structural parts, and samples have already been sent to automakers for testing," she told Mysteel Global.

Once the new mill is operating smoothly, Nippon Steel plans to shut the No.4 CGL at the same works that has been operating since 1991. "We will be able to have efficient production with the new plant and have more scope to produce higher grade materials," the spokeswoman said. The new CGL will be able to produce ultra-high-tensile steel sheets with 1.5 giga pascal (GPa) strength.

Presently, the company produces high-tensile steel sheet at Kimitsu - where the works currently hosts four CGLs - and at its Nagoya Works where three CGLs are working. However, Nippon Steel expects that demand of ultra-high-tensile steel sheets will continuing growing in future to meet the needs of auto makers trying to reduce vehicle body weight, according to the official. She refused to reveal the company's total capacity for high-tensile, or ultra-high-tensile sheets, for reasons of commercial confidentiality. Hi-ten steel is a strategic product for Nippon Steel.

"There are very few mills in Japan that can produce 1.5 GPa ultra-high-tensile sheet so the capability will be an advantage for Nippon Steel," according to an auto sheet trader in Tokyo.

The country's auto companies are the largest customers of the Japanese steel producers, consuming about 25% of all steel sold domestically, he said, so the Japanese mills are always keen to identify new requirements for their auto-sector customers and are always trying to be ready. "The Japanese mills will continue investing in developing and producing more value-added products for the auto sector," he added.

Earlier this month, Nippon Steel announced plans to invest an additional Yen 35 billion ($337.3 million) to expand its electrical sheet production capacity and improve quality at the Hirohata area of the Setouchi Works in western Japan in response to growing demand for electrical sheet for electric vehicles, as previously reported. The production capacity for both grain-oriented and non-grain-oriented sheets will be lifted by 40% when the facilities commission in April-September 2023, though Nippon Steel is keeping the actual tonnage a secret.

The company estimated that by fiscal 2025, global electrical sheet demand from the auto sector will have grown 14 times compared to that in Fiscal 2017, as reported.

Written by Yoko Manabe, yoko.manabe@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.