Posted on 02 Apr 2015
Nippon Steel & Sumitomo Metal will reduce April-June crude steel production by 10% from the previous quarter in a bid to maintain a stable supply-demand balance.
The steelmaker, which turned out an estimated 11 million tons of crude steel during the first three months of the year, plans to scale back production in the next three to around 10 million tons -- the same as in October-December 2012, when automakers and other exporters struggled because of a soaring yen.
Production will be reduced at the company's steel mills throughout Japan, including the Kimitsu and Kashima works.
The steel industry initially thought domestic auto sales would rebound in the second half of fiscal 2014 from a plunge that followed the consumption tax hike. But the recovery has turned out to be anemic.
In addition, orders for steel pipes from the energy industry are down 40% from a year ago because some producers are canceling development projects due to low crude oil prices.
Nippon Steel may not be alone in trimming production, since JFE Steel is also considering cutbacks starting in April.
