Japan to close over 7 million tons of blast furnace capacity within two years

 In recent years, due to slowing steel demand, Japan has been shutting down blast furnaces or pushing to decommission older blast furnaces, and has committed to operational optimization, focusing on more competitive assets and products.

In September 2020, Nippon Steel Corporation, Japan's largest steel manufacturer, decommissioned its 1.5 million t/y (2,150m3) blast furnace No. 2 at its Kyushu plant (Yawata). Previously, blast furnace No. 2 was mothballed as part of a temporary production reduction plan due to a sharp drop in steel demand due to the new crown pneumonia epidemic. Meanwhile, Nippon Steel suspended operations at a smelting plant at its Kyushu plant, including bloom production facilities. In September 2021, Nippon Steel will completely shut down the upstream and midstream facilities of the Setouchi Plant (Ku), including the 2 million tons/year No. 1 blast furnace (2650m3) and the 1.6 million tons/year No. 2 blast furnace (2080m3). At the same time, the company also shut down a blast furnace (3700m3) with a capacity of 2.1 million tons/year at its Kansai plant (Wakayama).

Japanese steelmakers will continue to shut down blast furnaces. JFE Steel plans to close its refractory raw materials, steelmaking and rolling divisions at its East Japan plant (Keihin) in September 2023. Among other JFE Steel facilities, the 4.2 million tonne/year No. 2 blast furnace, a converter steelmaking workshop for slab production and an electric furnace steelmaking workshop for billet and bloom production will also cease operations. Nippon Steel plans to decommission a 4.2 million ton/year blast furnace (5270m3) at the East Japan Plant (Kashima) in early 2025, which will be the company's fifth blast furnace to be deactivated based on a capacity optimization plan.

In 2020, the No. 5 blast furnace of JFE Steel's West Japan Plant (Fukuyama) with a capacity of 3.6 million tons/year will be put into operation, and the expansion and upgrade of the 3.8 million tons/year No. 4 blast furnace of the West Japan Plant (Kurashiki) will be completed in 2021. However, the new capacity cannot fully compensate for the withdrawal of production capacity. It is estimated that Japan has withdrawn more than 7.3 million tons/year of ironmaking capacity since 2020, while the newly added capacity is about 4 million tons/year. An additional 8.4 million tonnes/year of ironmaking capacity will be shut down by 2026, following the successful implementation of planned projects.

Under the general trend of decarbonization, Japan may continue to reduce steel production capacity. However, it is difficult for Japan to completely abandon the mainstream blast furnace-converter production route, because there are certain difficulties in introducing a more sustainable DRI-electric arc furnace route, including the high cost of imported energy. Currently, the Japanese government and steelmakers are formulating a decarbonization roadmap and developing decarbonization technologies with the aim of significantly reducing their carbon footprint while preserving traditional production methods.

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