According to foreign media reports, due to system failures, Japan's leading iron and steel enterprise Nippon Railway Sumitomo Jin's output and profit declined in fiscal year 2017-2018. The company plans to increase its average crude steel output to about 11 million tons in fiscal year 2019-2020 (2019.04.01-2020.03.31). In fiscal year 2018-19 (2018.04.01-2019.03.31), the company estimated the average quarterly output of crude steel to be 10.3 million tons. We plan to increase production in fiscal year 2020, which will be a key measure to increase profits.
Earlier this month, the world's third largest steelmaker of crude steel said its annual profit for fiscal year 2018-19 would be 6% lower than previously predicted because of a decline in crude steel production.
He said that the technical problems in steelmaking plants, including Oita and Wakayama in Western Japan, were mainly due to poor quality of steelmaking raw materials, ageing of equipment, and high operating system pressure in processing harder products such as high tensile strength steels.
To solve these problems, Nippon Steel Limited has increased the frequency of daily maintenance, and this month a new blast furnace was added to replace a 31-year-old blast furnace at the steel plant in Oita. This blast furnace used to be the longest running one in the world. Dafang Steel Plant has been fully restored to operation, and the new blast furnace located in Geshan will gradually increase production.
Japan is busy with the construction of related projects for the Tokyo Olympic Games in 2020. The domestic automobile and construction industries have strong demand for steel. However, due to natural disasters and system failures, steel mills can not achieve the original planned production.
In addition, iron ore prices have risen in Brazil since the recent tailings accident. Nippon Iron Sumitomo purchased about 30% of its total demand from Brazil, but the accident did not affect its purchases.
"Iron ore prices will gradually return to stability," Miyamoto said. Although the southern system is affected, the northern system of Vale has the capacity to increase production, and other miners have the potential to increase production.