December 3, 2008 / 5:35 AM / 12 years ago

Japan steel firms may shutter furnaces -paper

TOKYO, Dec 3 (Reuters) - Top Japanese steelmakers, including JFE Holdings Inc (5411.T), are considering temporarily closing down blast furnaces as early as this month to cope with falling demand, the Nikkei business daily reported on Wednesday.

JFE Steel Corp, the world’s third-largest steel maker and the core unit of JFE Holdings, is considering temporarily shutting some of its seven blast furnaces in Kurashiki and Fukuyama in western Japan, possibly on a rotating basis, the Nikkei said.

In November, JFE said it planned to cut output by 9.6 percent, or 1.5 million tonnes, in the October-March second half from the first half. [ID:nTFA003079]

Citing a company executive, the Nikkei said on Wednesday that JFE could expand the cuts in the second half to 2 million tonnes.

Falling demand from car makers and construction firms hurt by the global economic slowdown have hit the steel industry, prompting steel makers to cut output.

The Nikkei also said, without citing sources, that Kobe Steel Ltd (5406.T), Japan’s fourth-largest steel maker, is deciding whether to suspend operations at one of its three furnaces in western Japan.

Depending on the flow of orders, Nippon Steel Corp (5401.T), the world’s second-largest steel maker, may consider halting production at a blast furnace in western Japan, the Nikkei said. Nippon Steel had previously planned to shut the furnace early next year for maintenance.

Kobe Steel has said it plans to cut output in the six months to March by 600,000 tonnes from the previous six months, compared with an initial plan to cut 200,000 tonnes during the period.

A Kobe spokesman said the company currently suspends wind blowing operations at blast furnaces every two months for one day for checks and output adjustments, depending on orders.

Kobe could extend that pause to 1.5 days or hold it every month to achieve the new output cuts, he said.

Shares of Nippon Steel fell 2.6 percent to 263 yen. However, JFE was up 2.1 percent at 2,145 yen and Kobe Steel shares were flat at 150 yen. (Reporting by Risa Maeda, Yuko Inoue; editing by Sophie Hardach)

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