Steel market waits as rains flood south, central Japan
As of July 8 morning, the heavy rain that hit in southern Japan from July 3 had so far claimed 56 lives, left 17 missing, caused multiple landslides and swept away road and rail bridges. The highest precipitation recorded in the 24 hours to 3pm Tuesday was in Hita City in Kyuhsu’s Oita Prefecture – about 70kms from Nippon Steel’s huge integrated steel works – which topped 656 mm, according to Japan’s Meteorological Agency.
The heavy rain hit southern Kyushu’s Kumamoto, Kagoshima and Miyazaki prefectures over the weekend and early on, there was some concern about the status of Osaka Steel’s long products mill at Kumamoto, though a company official later confirmed no damage to facilities, as reported.
However, on Tuesday and into Wednesday the rain banks began inundating Nagasaki, Saga and Fukuoka prefectures in northern Kyushu and by noon Wednesday were beginning to lash southern Honshu.
North Kyushu hosts several works of major steelmakers including another of Nippon Steel’s at Yawata, the Kyushu works of Japan’s leading electric-arc-furnace producer Tokyo Steel Manufacturing, and those of rebar producers such Tokai Steel and Kyushu Steel. A Kyushu Steel official said the mini mill had stopped production on the night of July 7 to ensure the safety of employees but was planning to resume normal production from the evening of July 8. Japanese EAF producers normally operate only at night when utilities charges are lower, Mysteel Global noted. Nippon Steel, Tokyo Steel and Tokai Steel said they had been operating normally.
Officials from these companies confirmed no damage for their production facilities but were trying to determine the impact of the rains on their overall business, including the circumstances of their customers and the scale of damage to roads that are flooded, blocked by debris or washed away.
North Kyushu is also a major auto production base and on Monday, Toyota Motor temporarily idled operations at its three plants in Fukuoka from the night shift and all daytime shifts on Tuesday, while its subsidiary Daihatsu Motor idled operations at its two plants in Fukuoka and that in Oita for the night production shifts on July 7. Just to the north in Honshu as the rains spread north, Mazda Motor stopped production at its key plants in Hiroshima and Yamaguchi over the night shifts on Monday and Tuesday.
Daihatsu and Mazda confirmed their plants had already returned to normal operations from Wednesday morning and Toyota was intending to restart by the noon Wednesday too. These automakers said their works had not been damaged and that the stoppages were to protect the safety of workers. Officials at Nissan Motor, which also operates an assembly plant in Fukuoka, were not available for comment Wednesday but sources said the company had continued operating normally.
An auto sheet trader in Tokyo said that the car-plant stoppages had so far been for a limited period and so he expected these automakers would make up the lost output quickly. However, concerns remained about the impact the rain and floods would have on input material supplies and parts deliveries. “Though the car makers could return to normal operations, if those deliveries are delayed, they will have to slow their production in any case. We’ll have to watch for more information to emerge from the venders,” he warned.
Meanwhile, Tokai Carbon, a pioneer in Japan’s carbon industry, was less fortunate as flood waters washing into its Tanoura plant in Kumamoto last Saturday caused a phreatic explosion in a graphitization furnace which sparked a fire. Tokai Carbon is a major producer and supplier of graphite electrodes for Japan’s EAF-based steelmakers, but a company official confirmed that the Kumamoto plant is not involved in electrode production, so electrode supplies to the steel mills will not be affected.
By Wednesday, the heavy rains were moving to east, prompting the meteorological agency to temporarily issue a special heavy rain warning for Gifu and Nagano prefectures in central Japan. Though the alert was lifted later, the agency still advised households and businesses to exercise maximum caution. The heavy rain is expected to continue until Thursday in a wide area of Japan, including the Kanto region around Tokyo and in north Japan.
Written by Yoko Manabe, yoko.manabe@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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