Japan JFE plans to reduce capacity by 13%
Japan JFE loses 12.3 billion, plans to cut capacity by 13%
The latest news, JFE Steel will stop one of its blast furnaces in eastern Japan to reduce its domestic crude steel output by about 4 million tons or about 13% in response to sluggish domestic and foreign demand.
JFE Steel will stop iron production at its East Japan Works plant in Kawasaki, Kanagawa Prefecture, No. 2 blast furnace by the end of March 2024 (5,000 blast furnaces with an annual output of more than 4 million tons of molten iron). The shutdown will reduce the number of blast furnaces at the steel plant to seven. After closing, JFE Steel has an annual production capacity of 25-26 million tons.
JFE said the closure of facilities in Kanagawa Prefecture outside Tokyo affected about 1,200 workers and they would be reassigned. Another 2,000 people employed by JFE Group companies and partners will also be affected. At the same time, some production lines at the East Japan Plant (Chiba) will be closed in March 2023.
Japanese steelmakers have been affected by U.S.-China trade frictions and shrinking domestic markets, but the continued expansion of new coronavirus infections may further curb global demand for this material, which is widely used in manufacturing. Global steel prices are still under pressure. The large-scale production of Chinese steel producers has led to an oversupply. However, due to the shrinking market, domestic steel demand has been slowing.
JFE Steel's parent company, JFE Holdings Inc, lowered its earnings outlook on the same day. The company is currently expected to be in a loss and expects a loss of 190 billion yen ($ 1.74 billion, or approximately 12.3 billion yuan) in the fiscal year to the end of the month, compared to a previously estimated net profit of 13 billion yen.
