Nippon Steel restarts Kimitsu furnace on demand recovery

The restart was completed on the afternoon of November 24 as scheduled, and furnace operations are expected to normalise very soon, a company official said. Steel demand in the present October 2020-March 2021 half of the current fiscal year was already seen being higher than in the first half, the official explained, but the speed of the recovery has been quicker than expected and the restarted furnace needs to return to normal production as quickly as possible.

Nippon Steel plans to lift its steelmaking capacity utilization company-wide to 80% during this half in response to better domestic demand, higher than the 60-70% range in the first half, as previously reported.

The restarted Kimitsu blast furnace, called the No.2 and with an inner volume of 4,500 cu metres, was banked on June 14 as part of Nippon Steel’s measures to adjust output in response to the stagnation of steel demand caused by the COVID-19 outbreak.  

Kimitsu’s other blast furnace, the No.4 with 5,555 cu m volume, has been operating normally.  “The No.4 is already operating at a higher level, and now we have the No.2 to produce more, we will monitor demand trends closely and decide when to restart our other banked furnaces,” the official added.

Nippon Steel does not comment on production capacity by each blast furnace, but Kimitsu produced 6.83 million tonnes of crude steel during fiscal 2019 (April 2019-March 2020), according to the company.

Meanwhile, a few days ahead of the Kimitsu restart, Nippon Steel had reignited the No.2 furnace at its Muroran Works in Hokkaido on November 22 after completing a reline that involved expanding the inner volume to 3,014 cu m from 2,902 cu m, as previously reported.  A Tokyo-based trader suggested Nippon Steel would be wanting the restarted Muroran furnace to return to normal operations sooner because it is the only furnace which Muroran hosts and that works is the production base for special steel longs, now in strong demand from auto manufacturers.

This month’s restart of the Kimitsu and Muroran furnaces means the company still has three blast furnaces banked out of the 14 furnaces it operates. The three are the No.1 furnace in the Kashima Area of its East Nippon Works, the No.2 in the Kure part of the Setouchi Works in western Japan, and the No.1 furnace in the Wakayama Area of the Kansai Works in western Japan.

The next furnace Nippon Steel may restart could be the one at Kashima, the trader observed.  “The reduced availability of steel has been limiting Japan’s steel export capability while inquiries from overseas customers have been very active. Nippon Steel may eye lifting its export business by restarting another furnace, and Kashima is one of Nippon Steel’s large export bases,” he predicted.

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

Edited by Russ McCulloch, russ.mcculloch@mysteel.com