JFE says low steel demand could bring another year of loss
2020-08-14 10:41:44 [Print]
JFE Holdings, Japan's second-biggest steelmaker, on Wednesday warned of a net loss of 100 billion yen ($937 million) in the year to March 2021, its second consecutive year of loss, as the COVID-19 pandemic choked off steel demand.
JFE Holdings President Koji Kakigi said the company may speed up restructuring steps unveiled in March, including the closure of a blast furnace in its Keihin plant, near Tokyo, to cope with slumping demand.
JFE said in March it would cut steel capacity by 13% by shutting a blast furnace by March 2024. "We plan to accelerate our restructuring steps, with an assumption that the COVID-19 impact will stay for a while," Kakigi said, citing an unprecedentedly harsh business situation.
Japanese steelmakers were suffering from a weak economy before the COVID-19 crisis. They were also affected by U.S.-Sino trade tensions and rising costs of raw materials like iron ore as top producer China boosted steel output to meet infrastructure demand.
For the April-June quarter, JFE posted a net loss of 39.2 billion yen as its crude steel output tanked to 4.79 million tonnes on a parent basis from 7 million tonnes a year earlier as it temporarily suspended two blast furnaces in western Japan.
Kakigi said it may restart one of the two furnaces in October as it expects a pick-up in demand from automakers. Still, JFE may need to decide additional restructuring measures if it could not boost its annual steel output to around 24 million tonnes quickly, Kakigi said.
It forecast an annual crude steel output of 22 million tonnes for this year, against 26.73 million tonnes a year earlier.
JFE Holdings President Koji Kakigi said the company may speed up restructuring steps unveiled in March, including the closure of a blast furnace in its Keihin plant, near Tokyo, to cope with slumping demand.
JFE said in March it would cut steel capacity by 13% by shutting a blast furnace by March 2024. "We plan to accelerate our restructuring steps, with an assumption that the COVID-19 impact will stay for a while," Kakigi said, citing an unprecedentedly harsh business situation.
Japanese steelmakers were suffering from a weak economy before the COVID-19 crisis. They were also affected by U.S.-Sino trade tensions and rising costs of raw materials like iron ore as top producer China boosted steel output to meet infrastructure demand.
For the April-June quarter, JFE posted a net loss of 39.2 billion yen as its crude steel output tanked to 4.79 million tonnes on a parent basis from 7 million tonnes a year earlier as it temporarily suspended two blast furnaces in western Japan.
Kakigi said it may restart one of the two furnaces in October as it expects a pick-up in demand from automakers. Still, JFE may need to decide additional restructuring measures if it could not boost its annual steel output to around 24 million tonnes quickly, Kakigi said.
It forecast an annual crude steel output of 22 million tonnes for this year, against 26.73 million tonnes a year earlier.
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