Nippon Steel can cut steel output in 2020 more than 5 million tons due to the outbreak of coronavirus, announced in the Reuters.
"We have not yet cut production of steel ... but we have to be prepared for his decline," said Reuters Executive Vice President of Nippon Steel Katsuhiro Miyamoto in an interview last week.
Miyamoto reported that inventories at steel mills in China grew by 30 per cent in early February compared to the previous year, and stocks in the joint venture of Nippon Steel in Shanghai has also increased due to interruptions in transportation.
"We may be faced with greater consequences if industrial activity is not expected to grow rapidly in China," he said, adding that the demand for steel in automobiles, industrial equipment and shipbuilding, suffered from the slowdown in the world economy before the outbreak.
in addition, anxiety in Nippon Steel raises prices for raw materials, which accelerated after the closure of the border with Mongolia, which supplies about 30% of the main steelmaking ingredient to China, said Miyamoto.
"We can't say the impact of the epidemic, but we expect that in the first half of (next fiscal year) falls on hard times," he said.
In February, Nippon Steel announced a plan to close nearly 10% of its production capacity, which is unprecedented in the once dominant Japanese steel industry, which has suffered from falling demand in the domestic market and competition from China.
the Planned closure of 4 blast furnaces will reduce the annual steel production at 5 million tons to 49 million tons a year.
"In the future we may be difficult to continue to export 40% of melted steel in the future ... If the reduction of 5 million tons is not enough, we need to consider further action," he said.
