Posted on 02 Oct 2019
Japan's Nippon Steel will suspend operations for months at two domestic plants manufacturing alloy steel products used in auto production, it was learned Tuesday. A recent typhoon and a plant fire had forced the closure.
The plants make semi-finished steel products for wheels and other moving parts. Together, they produced in total over 50% of output of such products.
Nippon Steel is the largest manufacturer of automotive alloy steel in Japan.
Toyota Motor has started to source the products from alternative sources.
The two plants to be suspended are those that process melted iron respectively at its steelworks in Kimitsu, Chiba Prefecture, and subsidiary Nippon Steel Nisshin's Kure works in Hiroshima Prefecture. Their combined output is believed to be about 200,000 tons per month.
One of two smokestacks used for gas processing at the Kimitsu works was knocked over in typhoon Faxai in early September. At the Kure works, a fire in late August inflicted extensive damage to the control room and key parts at one of two relevant plants.
The Kimitsu plant will take up to six months, and the Kure plant as long as 10 months, to bring production back to the level before they were damaged.
The plant suspensions may reduce Nippon Steel's profit by several tens of billion yen.
A Toyota spokesperson said the automaker does not expect any impact on its auto production. But the automaker has started to source alloy steel products from other manufacturers.
Tire maker Bridgestone, which sources wheel-reinforcing material from Nippon Steel, has also experienced no impact on its production, but a spokesperson said the company has already arranged to purchase the material from alternative sources.
