Nippon Steel Corp., the world's second-largest steelmaker, may double its planned production cuts by closing a blast furnace for maintenance as the global recession dampens demand.
Nippon Steel is considering idling a 2.4 million-ton capacity furnace at its Kimitsu plant, which has three furnaces, in Chiba Prefecture that was due for maintenance in 2012, four industry executives said, declining to be identified.
The firm said in November it planned to lower output by about 2 million to 2.2 million tons in the six months to March 31, compared with the first half.
The company is discussing halting the furnace to prevent a plunge in prices as demand drops from vehicle makers and builders. Toyoto Motor Corp., Japan's largest automaker, expects its first annual operating loss in 71 years as sales in the United States, Europe and its domestic market plunge. JFE Steel Corp. said last month it would cut production to 26 percent below first-half output.
"There's a high possibility that Nippon Steel will choose to halt the furnace," said Atsushi Yamaguchi, an analyst at UBS AG in Tokyo. "Major Japanese mills like Nippon Steel place importance on the stability of the steel markets."