Sumitomo Metal Mining Co., Japan's largest nickel producer, will cut production of ferronickel next month as the global financial crisis reduces demand.
The company will close one of two lines at the Hyuga ferronickel smelter in Miyazaki Prefecture, bringing forward a 35-day maintenance scheduled to start in February, Hiromasa Ooba said Friday by phone. The company will extend the suspension of the line and later decide the size of the output cuts, he said.
Sumitomo Metal Mining forecast in April Hyuga Smelting Co. will produce 22,400 tons of ferronickel, which is used to make stainless steel.
Japanese stainless steel makers are cutting costs and reviewing production plans after nickel prices slumped and as demand drops in Japan because of stricter building permit rules and the recession. Pacific Metals Co. is also considering output cuts and reductions in capital expenditures for the year starting April 1, spokesman Masahiko Naito said.