[ferro-alloys.com]Japan's Nippon Steel said Tuesday it plans to lower output at the 4,500 cu m No. 2 blast furnace in the Kimitsu area of its East Nippon Works from mid-May, its third furnace to have rates lowered in two months, as lockdown measures to contain the coronavirus pandemic slash demand from automakers.

The steelmaker in early April announced it would lower output at its 5,370 cu m No. 1 blast furnace at the Kashima area of its East Nippon Works on April 16 and the 3,700 cu m No. 1 blast furnace at its Kansai Works in Wakayama in late April.

Nippon Steel has two blast furnaces in the Kimitsu area, No. 2 and No. 4.

"No. 2 and No. 4 blast furnaces in the Kimitsu area produce both flat and long products, but mainly supply steel products to both domestic and overseas automotive industries ie. Americas, South Korea, etc. A lot of our flats production capacity is for downstream mills such as cold-rolling and galvanizing," a source close to the company said, adding the latest output cut was response to "low domestic and overseas demand for automobile and home appliances."

Japan's vehicle production fell 9.3% year on year to 581,438 units in March, latest data from the Japan Automobile Manufacturers Association showed.

"Responding to the immediate sharp drop in demand for steel products...we have decided to implement additional measures...," Nippon Steel said in a statement. "We intend to continue responding to changes in steel demand in Japan and overseas and carrying out prompt and effective production adjustment."

Nippon Steel's latest move comes after the Japanese government last Thursday extended its state of emergency due to the pandemic from seven regions to the entire country until May 6.

Kimitsu's No. 2 and No. 4 furnaces each produce about 250,000-300,000 mt/month of flat and long products, according to S&P Global Platts calculations.

The Kimitsu mill, which produced 8.02 million mt of crude steel in fiscal 2018-19, also makes wire rods, plate, sheet, pipes and tubes.

Nippon Steel has a total crude steel production capacity about 52 million mt/year.

(S&P Global Platts)

• [Editor:王可]