Consider the time of steel glut through the 3rd electric furnace steel manufacturer to close its works
2015/06/02Some Japanese domestic electric furnace steel manufacturers have stopped production and integrated their production bases in succession as rationalization measures since last year.
This trend is attributed to a glut of steel at the external and internal markets. As it was previously pointed out that half of the 37 domestic electric furnace steel manufacturers should be consolidated, such measures have continued to be taken actually.
Recent rising electric power cost, which is especially higher within the jurisdictions of Tokyo Electric Power Co., Inc. and Kansai Electric Power Co., Inc., has put pressure on profits of the electric furnace steel manufacturers.
Osaka Steel Co., Ltd. based in Chuo Ward, Osaka City announced on 28 May to review its production system in Osaka area. Thus, its steel production at Osaka Okajima Works will be stopped and integrated into its Sakai Works.
The company will stop steel manufacturing process at its Osaka Okajima Works located in Taisho Ward, Osaka City to transfer it to the Sakai Works. As a result, Osaka Okajima Works will stop purchasing scrap. The company said to leave the rolling process at Osaka Okajima Works to continue operation, which might be difficult in future.
As rising power cost has continued to put more pressures on profits, the electric furnace steel manufactures within the area of Kansai Power Co., Ltd. are expected to reduce or stop production, or even to close their plants. As a result, scrap demand will drop further on a nationwide basis.